Statistics

Lecture 1
Dr. Sanjeev Panandikar

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 Text Book
• Statistics for Business and Economics
by Anderson, Sweeny & Williams

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 Evaluation
• Group Assignments (in the class only)
• Group Project
• Final Examination

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 Consider the statements
• Of 16,000 food makers, the largest 20 now account for nearly
54% of checkout sales.
• The Consumer Price Index (CPI) declined 0.3% in April
• From a database of 3458 stock funds, only 172 funds earned
an A rating.
• At Marriott International, more than 40% of managers
worked their way up through the ranks.
• The Dow Jones Industrial Average closed at 9216.79 on July 7.
• Nokia, the world’s largest and most profitable mobile phone
maker, estimated an annual demand for 405 million phones.

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 Application in Business & Economics

• Accounting
• Finance
• Marketing
• Production
• Quality Control
• Economics

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 Data
• Elements
Entities on which data are collected
• Variables
It is the characteristic of interest for the elements
• Observations
The set of measurements obtained for a particular
element is called Observation.

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 For example
Company Exchange Ticker Market Cap P/E Ratio GP margin
Symbol
ABB NSE ABBTLD
Britannia NSE
Castrol BSE
East India OTC
Hotels
Finolex OTC
Glaxo Smith BSE
ITC NSE
JK Paper BSE
Mahindra NSE

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 Example 2
Sr. No. Employee Employee Plant Experienc Salary Bonus
name Code Location e in the
company
1

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 Scales of Measurement
• Nominal
Names of car brand, laptops, fruits, etc.
• Ordinal
Values are ordered
• Interval
Numerals like Integers, fractions etc.
• Ratio
Interval plus absolute zero

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 Qualitative & Quantitative data
• Qualitative measurements:
Nominal
Ordinal
• Quantitative:
Interval
Ratio

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 Cross-Sectional & Time Series Data
• Cross-sectional Data: Data which is collected
at approximately same point of time.

• Time Series Data: Data collected over several

time periods.

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 Statistical Inference
• Population

• Sample

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 Sampling
• When population is large and it is not affordable
to measure variables for each and every element
we have to depend on the sample.
• In order to get reliable results we need to draw
sample in scientific way. This is called sampling.
• There are number of ways to draw a sample
which should be free from any bias.
• Each kind of sampling method has its benefits
and limitations.
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 Type of Inferences
•  Estimation
E.g.
• Fiducial Limits
E.g. P( a< µ <b) =98%
• Testing of Hypothesis
E.g. Null ( and Alternate hypothesis (

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 Probability Distribution
• Parametric
Discrete: Binomial, Poisson, Multinomial
Continuous: Cauchy, Normal, Beta, Gama
• Non-Parametric

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 Dependence of variables
• Correlation (Bivariate, Multivariate)
• Regression (Bivariate, Multivariate)
• Fitting of Curves (Linear, Quadratic,
exponential, etc.)
• Time Series Analysis

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 Methods used to measure dependence

• Discrete Data Analysis :

Nominal
Ordinal
• Continuous Data Analysis:
Interval
Ratio

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 Statistical Models
• Model building
• Model validation
• ANOVA
• ANCOVA

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 Models
• They
  are used for understanding the underlying
phenomenon, fine tuning the process,
prediction etc.
• Nature:

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 Multivariate Methods
• Testing Multivariate Hypothesis
• Multivariate ANOVA (MANOVA)
• Multivariate ANCOVA (MANCOVA)
• Factor Analysis
• Conjoint Analysis
• Correspondence Analysis
• Multidimensional Scaling
• Cluster Analysis, etc.
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 Report Writing
• Report should be written in logical manner.
• The statements should be written in plain
English words and not just accept/reject

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