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Statistics For Business and Economics: Describing Data: Graphical
Statistics For Business and Economics: Describing Data: Graphical
Statistics For Business and Economics: Describing Data: Graphical
Chapter 1
Summary
Describing Data: Graphical
Andrianantenaina Hajanirina, B.A., B.Sc., M.M.
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 1-1
Homework
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-2
Permutation Rule……
where n = total # of
n! objects and r = how
n Pr many you need.
(n r )!
“n objects taken r at a
time”
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-3
Remember the This is a permutation:
business woman who
only wanted to rank
the top 3 out of 5
places?
5! 5! 120
5 P3 60
5 4 3 60 (5 3)! 2! 2
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-4
Definition……
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-5
Let’s compare ABCD – Find
permutations of 2 and combinations of
2.
Permutations of 2: Combinations of 2:
AB CA AB
AC CB AC
AD CD AD
BA DA BC
BC DB BD
BD DC CD
Note: AB is NOT the Note: AB is the same
same as BA. as BA
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-6
When different orderings of the same items
are counted separately, we have a
permutation problem, but when different
orderings of the same items are not counted
separately, we have a combination problem.
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-7
Combination Rule……
n!
C
n r
(n r )!r!
Read: “n” objects taken “r” at a time.
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-8
Example……
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-9
Example……
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-10
Outlines
I Introduction
Definition of Statistics
Statistical Method
History and Importance of Statistics
Types of Data
Sampling Methods
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-11
BASIC CONCEPTS IN
STATISTICS
What is Statistics?
Definition
Statistics is the science of collecting, organizing,
Course of study
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-12
Why study statistics?
Numerical information is everywhere. Statistics
will be very useful in order to understand and
process these numerical information.
Statistical Techniques are used to make
decisions that affect our daily lives.
Knowledge of statistical methods will help you
understand how decisions are made and give
you a better understanding of how they affect
you.
Source: Lind, D.A., Marchall, W.G. & Wathen, S.A. , Basic Statistics for
Business & Economics 5th Edition
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-13
Basic terminologies
VARIABLES AND CONSTANT
CONSTANT - Characteristics of objects,
people, or events that does not vary.
14
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-14
Population and Sample
POPULATION - The entire group of
individuals, objects, or measurements of
interest.
SAMPLE - a subset, or part, of the population
of interest
Usually populations are so large that a
researcher cannot examine the entire group.
Therefore, a sample is selected to represent
the population in a research study. The goal is
to use the results obtained from the sample to
help answer questions about the population.
15
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-15
Population vs Sample
population
A E F
B LY
Z M N
R Q
C D V X K
P W
P O T G J U
S
I H
sample
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-17
Inferential Statistics
Inferential Statistics uses sample
data to reach conclusions about the
population from which the sample was
taken
Provides procedures to draw inferences
about a population from a sample.
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-18
Parameter vs. Statistic
Parameter — descriptive measure of the
population
Usually represented by Greek letters
Statistic — descriptive measure of a sample
Usually represented by Roman letters
Parameter Statistic
Average µ M
Standard Deviation s
Regression coef ρ r
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-19
Types of Data
D ATA
Q u a lit a t iv e o r a t t r ib u t e Q u a n t it a t iv e o r n u m e r ic a l
(ty p e o f c a r o w n e d )
d is c r e t e c o n t in u o u s
( n u m b e r o f c h ild r e n ) ( t im e t a k e n fo r a n e x a m )
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-20
Levels of Measurement
Nominal
Ordinal
Interval
Ratio
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-21
Nominal data
. Data that is Gender : 0 – Male
classified into 1- Female
categories and
cannot be Religion: 1 – Catholic
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-22
Ordinal data
data arranged in
some order, but Position within an
the differences academic organization
between data 1 for President
values cannot be 2 for Vice President
determined or are 3 for Dean
4 for Department Chair
meaningless. 5 for Faculty member
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-23
Interval Data
Distances between
consecutive integers are
equal
Examples:
Relative magnitude of Temperature
numbers is meaningful on the
Differences between numbers Fahrenheit
are comparable
Location of origin, zero, is
scale.
arbitrary Intelligence
Quotient
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-24
Ratio Scale
Highest level of
measurement Examples:
Relative magnitude of
•Height, Weight,
and Volume
numbers is meaningful
Differences between
•Monetary
Variables, such as
numbers are
comparable Profit and Loss,
Location of origin, Revenues, and
zero, is absolute Expenses
(natural) •Financial ratios
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-25
Data Level, Operations,
Operations,
and Statistical Methods
Data Statistical
Meaningful Operations
Level Methods
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-26
APPLICATION
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-27
Look at the data available in the PT Clinic and find examples of
each Level of measurements.
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-28
COLLECTION OF DATA
Types of Data According to Source
Primary Data – data that comes from
original source
Data from personal accounts
Secondary Data – data that has been
previously gathered by other
individuals or agencies
Data from newspapers, pamphlets,
books
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-29
Methods of Data Collection
Direct or Interview Method- person to
person exchange between the interviewer and
the interviewee
Indirect or Questionnaire Method-
written responses are given to prepared
questions
Registration Method- enforced by
certain laws/rules
Observation Method
Experiment Method
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-30
Data presentation
Textual Method – data is
presented in paragraph form
Tabular Method- data is
Grouped data
• have been organized into a frequency
distribution
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-32
Frequency Distribution
A Frequency Distribution is a grouping of
data into mutually exclusive categories
showing the number of observations in each
class.
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-33
Dr. Tillman is Dean of the School of Business
Socastee University. He wishes prepare to a report
showing the number of minutes per week students
spend studying. He selects a random sample of 30
students and determines the number of minutes each
student studied last week.
150 237 197 154 183 230 142 208 135 207
157 140 178 338 232 129 271 166 174 261
186 129 203 137 214 183 298 171 189 103
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-35
PRESENTATION OF DATA
Line graphs are typically used to show the
change or trend in a variable over time.
Year Males Females
1992 30,5 32,9
1993 30,8 33,2
1994 31,1 33,5
1995 31,4 33,8
1996 31,6 34,0
1997 31,9 34,3
1998 32,2 34,6
1999 32,5 34,9
2000 32,8 35,2
2001 33,2 35,5
2002 33,5
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc.
35,8 Line Graphs
Chap 2-37
U.S. median age by gender
Males
40 Females
Median Age
35
30
25
Example 3
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc.
continued Chap 2-38
A Bar Chart can be used to depict any of the
levels of measurement (nominal, ordinal, interval, or
ratio).
Construct a bar chart for the number of unemployed per
100,000 population for selected cities during 2001
City Number of unemployed
per 100,000 population
Atlanta, GA 7300
Boston, MA 5400
Chicago, IL 6700
Los Angeles, CA 8900
New York, NY 8200
Washington, D.C. 8900
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. BarChap
Chart
2-39
10000
8900 8900
# unemployed/100,000
9000 8200
8000 7300
6700
7000
6000 5400 Atlanta
5000 Boston
4000 Chicago
3000 Los Angeles
2000 New York
1000 Washington
0
1 2 3 4 5 6
Cities
6,50%
18,50%
4,50%
Nike
Adidas
Reebok
24,50% Asics
Other
46%
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-43
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-44
Statistics for
Business and Economics
6th Edition
Chapter 2
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-45
Chapter Goals
After completing this chapter, you should be able to:
Identify types of data and levels of measurement
Create and interpret graphs to describe categorical variables:
frequency distribution, bar chart, pie chart, Pareto diagram
Create a line chart to describe time-series data
Create and interpret graphs to describe numerical variables:
frequency distribution, histogram, ogive, stem-and-leaf display
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-46
Types of Data
Data
Categorical Numerical
Examples:
Marital Status
Are you registered to Discrete Continuous
vote?
Eye Color Examples: Examples:
(Defined categories or Number of Children Weight
groups) Defects per hour Voltage
(Counted items) (Measured characteristics)
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-47
Measurement Levels
Differences between
measurements, true Ratio Data
zero exists
Quantitative Data
Differences between
measurements but no Interval Data
true zero
Ordered Categories
(rankings, order, or Ordinal Data
scaling)
Qualitative Data
Categories (no
ordering or direction) Nominal Data
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-48
Graphical
Presentation of Data
Data in raw form are usually not easy to use
for decision making
Some type of organization is needed
Table
Graph
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-49
Graphical
Presentation of Data
(continued)
Techniques reviewed in this chapter:
Categorical Numerical
Variables Variables
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-50
Tables and Graphs for
Categorical Variables
Categorical
Data
Frequency
Distribution Bar Pie Pareto
Table Chart Chart Diagram
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-51
The Frequency
Distribution Table
Summarize data by category
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-52
Bar and Pie Charts
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-53
Bar Chart Example
Hospital Number
Unit of Patients
2000
1000
0
Cardiac
Emergency
Intensive
Maternity
Surgery
Care
Care
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-54
Pie Chart Example
Hospital Number % of
Unit of Patients Total Hospital Patients by Unit
Cardiac Care 1,052 11.93
Cardiac Care
Emergency 2,245 25.46 12%
Intensive Care 340 3.86
Maternity 552 6.26
Surgery 4,630 52.50
Emergency
Surgery 25%
53%
Intensive Care
(Percentages 4%
are rounded to Maternity
the nearest 6%
percent)
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-55
Pareto Diagram
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-56
Pareto Diagram Example
Example: 400 defective items are examined
for cause of defect:
Source of
Manufacturing Error Number of defects
Bad Weld 34
Poor Alignment 223
Missing Part 25
Paint Flaw 78
Electrical Short 19
Cracked case 21
Total 400
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-57
Pareto Diagram Example
(continued)
Source of
Manufacturing Error Number of defects % of Total Defects
Poor Alignment 223 55.75
Paint Flaw 78 19.50
Bad Weld 34 8.50
Missing Part 25 6.25
Cracked case 21 5.25
Electrical Short 19 4.75
Total 400 100%
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-58
Pareto Diagram Example
(continued)
Step 3: Show results graphically
Pareto Diagram: Cause of Manufacturing Defect
60% 100%
% of defects in each category
90%
70%
(bar graph)
40%
60%
30% 50%
40%
20%
30%
20%
10%
10%
0% 0%
Poor Alignment Paint Flaw Bad Weld Missing Part Cracked case Electrical Short
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-59
Graphs for Time-Series Data
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-60
Line Chart Example
350
300
Thousands of subscribers
250
200
150
100
50
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-61
Graphs to Describe
Numerical Variables
Numerical Data
Histogram Ogive
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-62
Frequency Distributions
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-63
Why Use Frequency Distributions?
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-64
Class Intervals
and Class Boundaries
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-65
Frequency Distribution Example
24, 35, 17, 21, 24, 37, 26, 46, 58, 30,
32, 13, 12, 38, 41, 43, 44, 27, 53, 27
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-66
Frequency Distribution Example
(continued)
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-67
Frequency Distribution Example
(continued)
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
Relative
Interval Frequency Percentage
Frequency
10 but less than 20 3 .15 15
20 but less than 30 6 .30 30
30 but less than 40 5 .25 25
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-68
Histogram
Interval Frequency
His togram : Daily High Te m pe rature
10 but less than 20 3
20 but less than 30 6 7 6
30 but less than 40 5
6 5
40 but less than 50 4
50 but less than 60 2 5 4
Frequency
4 3
3 2
2
1 0 0
(No gaps 0
between 0 0 10 10 2020 30 30 40 40 50 50 60 60
bars) 70 Temperature in Degrees
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-70
Histograms in Excel
1
Select
Tools/Data Analysis
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-71
Histograms in Excel
(continued)
2
Choose Histogram
(
Input data range and bin
range (bin range is a cell
range containing the upper
3 interval endpoints for each class
grouping)
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-73
How Many Class Intervals?
Frequency
with gaps from empty classes 2
1.5
Can give a poor indication of how 1
0.5
frequency varies across classes 0
4
8
12
16
20
24
28
32
36
40
44
48
52
56
60
More
Temperature
10
may compress variation too much and 8
Frequency
yield a blocky distribution 6
4
can obscure important patterns of 2
variation. 0
0 30 60 More
Temperature
(X axis labels are upper class endpoints)
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-74
The Cumulative
Frequency Distribuiton
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
Cumulative Cumulative
Class Frequency Percentage
Frequency Percentage
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-75
The Ogive
Graphing Cumulative Frequencies
Upper
interval Cumulative
Interval endpoint Percentage
Less than 10 10 0
10 but less than 20 20 15
20 but less than 30 30 45 Ogive: Daily High Temperature
30 but less than 40 40 70
40 but less than 50 50 90 100
50 but less than 60 60 100
Cumulative Percentage 80
60
40
20
0
10 20 30 40 50 60
Interval endpoints
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-76
Distribution Shape
The shape of the distribution is said to be
symmetric if the observations are balanced,
or evenly distributed, about the center.
Symmetric Distribution
10
9
8
7
Frequency
6
5
4
3
2
1
0
1 2 3 4 5 6 7 8 9
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-77
Distribution Shape
(continued)
The shape of the distribution is said to be
skewed if the observations are not
symmetrically distributed around the center.
Positively Skewed Distribution
Frequency
extends to the right in the direction of 6
positive values.
4
0
1 2 3 4 5 6 7 8 9
6
negative values. 4
0
1 2 3 4 5 6 7 8 9
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-78
Stem-and-Leaf Diagram
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-79
Example
Data in ordered array:
21, 24, 24, 26, 27, 27, 30, 32, 38, 41
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-80
Example
(continued)
Data in ordered array:
21, 24, 24, 26, 27, 27, 30, 32, 38, 41
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-81
Using other stem units
Using the 100’s digit as the stem:
Round off the 10’s digit to form the leaves
Stem Leaf
613 would become 6 1
776 would become 7 8
...
1224 becomes 12 2
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-82
Using other stem units
(continued)
Categorical Numerical
(Qualitative) (Quantitative)
Variables Variables
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-84
Scatter Diagrams
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-85
Scatter Diagram Example
150
33 160
38 167 100
42 170 50
50 188 0
55 195 0 10 20 30 40 50 60 70
60 200
Volume per Day
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-86
Scatter Diagrams in Excel
1
Select the chart wizard
2
Select XY(Scatter) option,
then click “Next”
3
When prompted, enter
the data range, desired
legend, and desired
destination to complete
the scatter diagram
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-87
Cross Tables
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-88
Cross Table Example
4 x 3 Cross Table for Investment Choices by Investor
(values in $1000’s)
Investment Investor A Investor B Investor C Total
Category
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-89
Graphing
Multivariate Categorical Data
(continued)
S avings
CD
B onds
S toc k s
0 10 20 30 40 50 60
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-90
Side-by-Side Chart Example
Sales by quarter for three sales territories:
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
East 20.4 27.4 59 20.4
W est 30.6 38.6 34.6 31.6
North 45.9 46.9 45 43.9
60
50
40
East
30 West
North
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-91
Data Presentation Errors
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-92
Data Presentation Errors
(continued)
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-93
Descriptive stat:Mean and
standard deviation
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-94
Chapter Summary
Reviewed types of data and measurement levels
Data in raw form are usually not easy to use for decision
making -- Some type of organization is needed:
Table Graph
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 2-96