Introduction to Statistics

Statistics: Introduction
• Understanding Statistics
• Definition
• Data Types
• Levels of Measurement
Definition:
Statistics is a science which deals with the
collection, classification, presentation
(tabulation, graphs), analysis and
interpretation of numerical data.
Types of Data:
Primary Data: Are those which are collected
a fresh and for the first time and thus happen
to be original in character and known as
primary data.

Secondary Data: Are those which have been

collected by someone else and which have
already been passed through the statistical
process.
Types of Data:

Data

Categorical Numerical
(Qualitative) (Quantitative)

Discrete Continuous
 Classification of data
• Qualitative Data which shows the quality or
attributes of an individual or thing any other
matter of study For example- Eye Color, First
Name, Favorite Movie, Political Party
 Quantitative data are those for which the value
has numerical meaning. You can do mathematical
operations on the values of quantitative variables
(like taking an average). Examples - A person’s
Height, Weight, Income, Resting Pulse Rate, Blood
Alcohol Level
 Quantitative data
• Variable: Data item which takes upon different
values at different point of time and with each
different observation.
• Discrete variables are usually obtained by
counting. There are a finite or countable number
of choices available with discrete data. You can't
have 2.63 people in the room.
• Continuous variables are usually obtained by
measuring. Length, weight, and time are all
examples of continuous variables. Can be defined
in intervals.
Levels of Measurement
Nominal
Ordinal
Interval
Ratio
 Levels of Measurement contd.

 Nominal
 Only names are meaningful.
 Can be qualitative only.
 Data values serve as labels.
 Labels have no meaningful order.
Examples: Blood Type
 Levels of Measurement contd.

 Ordinal
 Adds an order to the names.
 It can be qualitative or quantitative.
 Data values serve as labels but the labels have
a natural meaningful order.
 Differences between values, however, are
meaningless.
Examples: Statistics Grade, Basketball Rankings
 Levels of Measurement contd.

• Interval
 Data values are numerical
 They have a meaningful order
 Differences between data values are
meaningful
 The ratio of two data values, however, is
meaningless. This occurs when zero is an
arbitrary measurement rather than actually
indicating “nothing”
Examples: Temperature, Year of Birth
 Levels of Measurement contd.

• Ratio .
• Data values are numerical, have order, and
both differences and ratios of values are
meaningful.
• Zero measurement indicates absence of
quantity being measured.
Examples : Weight, Volume, Number of
Children
Some statistical terms
• Raw data or data
• Variable (discrete or continuous)
• Array
• Classification
• Tabulation
• Frequency distribution (discrete or continuous)
• Range
• Class
• Class limit
• Class interval
• Class mark or mid-value
• Inclusive series and exclusive series
• Cumulative frequency
• Following is the time spent in hours by 30
management students on social
networking site in a week.
2, 3, 4, 6, 9, 3, 4, 1, 1, 4, 5, 9, 4, 2, 3, 8, 2,
8, 7, 8, 7, 4, 3,8, 6, 5, 4, 7, 10, 10
• Following are the mutual fund prices reported at the
end of the week for selected 40 nationally sold funds
by six mutual fund companies
10 17 15 22 11 16 19 24 29 18 25 26 32 14
17 20 23 27 30 12 15 18 24 36 18 15 21 28
33 38 34 13 10 16 20 22 29 29 23 31

Arrange these prices into a frequency distribution

having a suitable number of classes.
Diagrammatic and Graphic
Presentation of Data
 Data

Numerical Categorical

Frequency Pareto
Histogram Ogive Pie Charts Bar Charts
Polygon Diagrams
• Following are the marks scored by 20 students
in Statistics end semester assessment:
38, 13, 17, 21, 24, 12, 26, 58, 27, 44, 32, 35, 37,
24, 41, 43, 30, 46, 53, 27
 Graphing Numerical Data:
The Histogram
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Histogram

7 6
6 5
No Gaps
Frequency

5 4
4 3
Between
3 2
Bars
2
1 0 0
0
5 15 25 35 45 55 More

Class Boundaries
Class Midpoints
 Graphing Numerical Data:
The Frequency Polygon
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
Frequency

7
6
5
4
3
2
1
0
5 15 25 35 45 55 More

Class Midpoints
 Graphing Numerical Data:
The Ogive (Cumulative Frequency Curve)
Draw a 'less than' ogive curve for the following data:
120

100

80

cf
60

40

20

0
0 10 20 30 40 50 60 70 80 90

Class Boundaries upper limit (Not

Midpoints)
 Example

Using the data given below, construct a 'more than'

cumulative frequency table and draw the Ogive
(More than ogive)
 Graphing Categorical Data
Categorical Data

Graphing Data

Pie Charts

CD Bar Charts Pareto Diagram

S a vi n g s

B onds

45 120
S to c k s
40
100
35
0 10 20 30 40 50 30 80
25
60
20
15 40
10
20
5
0 0
S to c k s B onds S a vi n g s CD
 Summary Table
(for an Investor’s Portfolio)

Investment Category Amount Percentage

(in thousands $)

Stocks 46.5 42.27

Bonds 32 29.09
MF’s 15.5 14.09
Savings 16 14.55
Total 110 100

Variables are Categorical.

 Bar Chart
(for an Investor’s Portfolio)

Investor's Portfolio

Savings
CD

Bonds
Stocks

0 10 20 30 40 50
Amount in K$
 Pie Chart
(for an Investor’s Portfolio)

Amount Invested in K$

Savings
15%

Stocks
CD 42%
14%

Percentages are
rounded to the
Bonds nearest percent.
29%
 Pareto Diagram
45% 100%

40% 90%

80%
35%
Axis for
70%
bar 30%

chart 60%

shows 25%

50%
% 20%
invested 40%

in each 15%
30%
category 10%
Axis for line
20%
graph
5% 10% shows
0% 0%
cumulative
Stocks Bonds Savings CD % invested
Principles of Graphical Excellence
• Well-Designed Presentation of Data that
Provides:
– Substance
– Statistics
– Design
• Communicate Complex Ideas with Clarity,
Precision and Efficiency
• Gives the Largest Number of Ideas in the Most
Efficient Manner
• Almost Always Involves Several Dimensions
• Telling the Truth about the Data
 Errors in Presenting Data
• Using ‘Chart Junk’
• Compressing the Vertical Axis
• No Zero Point on the Vertical Axis
 ‘Chart Junk’

Bad Presentation  Good Presentation

Minimum Wage Minimum Wage

1960: $1.00 $
4
1970: $1.60
2
1980: $3.10

0
1990: $3.80 1960 1970 1980 1990
 Compressing Vertical Axis

Bad Presentation Good Presentation

Quarterly Sales Quarterly Sales

200
$ 50
$

100 25

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
 No Zero Point on Vertical Axis

Bad Presentation  Good Presentation

Monthly Sales
Monthly Sales $
$ 45
45 42
42 39
39 36
36
0
J F M A M J J F M A M J

Graphing the first six months of sales.