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Lecture 1a: Introduction to

Statistics

Outline
Understand why we study statistics
Explain what is meant by descriptive statistics and
inferential statistics

Distinguish between a qualitative variable and a

quantitative variable

Distinguish between a discrete variable and a continuous

variable

Distinguish among the nominal, ordinal, interval, and

ratio levels of measurement

Define the terms mutually exclusive and exhaustive

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Why use statistics?

Statistics are
everywhere

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Why use statistics?

Statistics
help you
make
decisions

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Why use statistics?

Statistical techniques
are used extensively
by marketing,
accounting, quality
control, consumers,
professional sports
people, hospital
administrators,
educators, politicians,
physicians, and many
others

Statistics give
you a better
understanding
of the decision
making process

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Who Uses Statistics?

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How to make an Informed

decision?

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What is Meant by Statistics?

Statistics is the science
of collecting,
organizing, presenting,
analyzing, and
interpreting data to
assist in making more
effective decisions.

1. Adequate information? Additional information?

2. No misleading information?
3. Summarize the information.

4. Analyze available information.

5. Conclusions!

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Making decisions using statistics

Interpretdata

Types of Statistics
Descriptive
Statistics

Inferential
Statistics

Presentdata
Analyzedata
Organizedata
Collect data
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Types of Statistics

Types of Statistics

Descriptive Statistics: Methods of organizing,

Inferential Statistics:: A decision, estimate,

prediction, or generalization about a population,
based on a sample

summarizing, and presenting data in an informative

way
Example 1: The US
g
government
reports
p
the
population of the US was
179,323,000 in 1990, and
265,000,000 in 2000.

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Example 2: According to Consumer

Reports, General Electric washing
machine
hi owners reported
t d9
problems per 100 machines during
2001. The statistic 9 describes the
number of problems out of every
100 machines.

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A Population
p
is a Collection
of all possible
individuals,
objects, or
measurements
of interest
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A Sample is
a portion, or
part, of the
population of
interest

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Types of Variables

Types of Statistics
(examples of inferential statistics)

Example 1: Wine tasters

sip a few drops of wine
to make a decision with
respect to all the wine
waiting to be released for
sale.

For a Qualitative or Attribute Variable the

characteristic being studied is nonnumeric

Gender

Eye
Color

Example 2: The accounting

department of a large firm will select
a sample of the invoices to check for
accuracy for all the invoices of the
company.
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Type of car

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Types of Variables
In a Quantitative Variable information is
reported numerically

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Types of Variables
Quantitative variables can be classified as
either Discrete or Continuous

Example: the number of

bedrooms in a house, or
the number of hammers
sold at the local Home
Depot (1, 2, 3,,etc).

Minutes remaining in class

Number of children in a family

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Discrete Variables: can only assume certain

values and there are usuallyy gaps
g p between values

Balance in your checking account

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Types of Variables

Summary of Types of Variables

A Continuous Variable can assume

any value within a specified range
The pressure in a tire

DATA

Qualitative or attribute
(type of car owned)

The weight of a mutton chop

Quantitative or numerical

discrete
(number of children)

continuous
(time taken for an exam)

The height of students in a

class
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Levels of Measurement

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Levels of Measurement
Gender

There are four levels of data:

Nominal
Ordinal
Interval
Ratio

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Nominal level:
Data that is
classified into
categories and
cannot be
arranged in any
particular order

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Eye
Color

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Levels of Measurement

Levels of Measurement

Nominal level variables must be:

Ordinal level: involves data arranged in some

Mutually exclusive

order, but the differences between data values

cannot be determined or are meaningless

An individual, object, or
measurement is included in only
one category

Exhaustive
Each individual, object, or
measurement must appear in
one of the categories
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Levels of Measurement
Interval level:
Similar to the ordinal level, with the additional
property that meaningful amounts of differences
between data values can be determined. There
point
is no natural zero p

During a taste test

of 4 soft drinks
drinks,
Coca Cola was
ranked number 1,
Dr. Pepper number
2, Pepsi number 3,
and Root Beer
number 4
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1

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Levels of Measurement
Ratio level: the interval level with an
inherent zero starting point. Differences and
ratios are meaningful for this level of
measurement
Miles traveled by sales
representative
i in
i a monthh

Monthly income
of surgeons

Temperature on
the Fahrenheit
scale
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Levels of Measurement

Practice Problem 1

For each of the following, determine whether the group is a sample or

a population.
The participants in a study of a new cholesterol drug. Sample
The drivers who received a speeding ticket Kansas City last month. Population
Those on welfare in Cook County (Chicago), Illinois. Population
The 30 stocks reported as a part of the Dow Jones Industrial Average. Sample

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Practice Problem 3

Practice Problem 2
Chicago-based Market Facts asked a sample of 1,960
consumers to try a newly developed chicken dinner by
Boston Market. Of the 1,960 sampled, 1,176 said they
would purchase the dinner if it is marketed.
(a) What could Market Facts report to Boston Market
regarding acceptance of the chicken dinner in the
population?
(b) Is this an example of descriptive statistics or
inferential statistics? Explain.

Real Estate data, which report information on homes sold in

the Denver, Colorado, area last year. Consider the following
variables: selling price, number of bedrooms, township,
and distance from the center of the city.
Which of the variables are qualitative and which are
quantitative?
township

all the rest

Determin the level of measurement for each of the

variables.
Township = nominal level

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All the rest= ratio

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Practice Problem 4
What is the level of measurement reflected by the
following data?
(a) The age of each person in a sample of 10 adults who
listen to one of the 1,230
1 230 talk radio station in the United
States is :
35, 29, 41, 34, 44, 46, 42, 42, 37, 47
(b) In a survey of 200 luxury-car owners, 100 were from
California, 50 from New York, 30 from Illinois, and 20
from Ohio.
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