INTRODUCTION TO

STATISTICS

QMT412

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Learning Outcomes
What is statistics?
Uses of statistics
Types of statistics
Common statistical terms
Sources of data
Types of variables
Scales of measurement

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What is Statistics?
Statistics is the science of:
1.Collecting Data

4. Analyzing
Data
2.Organizing Data

3.Presenting

5.
Interpreting
/DecisionMaking

Data

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1984-1994 T/Maker Co.

Why?

1984-1994 T/Maker Co.

Uses of Statistics

Education

Predict most favourite

subject
Predict CGPA
Law
Organize evidence to
make decision

Medicine
Effectiveness of drugs
Predict diseases

Business/Marketing
Predict Sales
Consumer Preferences
Financial Trends

TYPES OF STATISTICS
DESCRIPTIVE

INFERENTIAL

Types of STATISTICS

DESCRIPTIVE
-describe and summarize
characteristics
-consist collecting, organizing,
summarizing and presentations
of data
Ex: percentage, mean, median
Bar chart, pie chart, frequency
table, box plot

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INFERENTIAL
-make inference from sample
populations
-involve statistical tests
-results used to make conclusion
Ex: estimation, hypothesis testing
(t- test, z-test, forecasting,
regression)

Population and sample

Population
Sample

Subject or member
or element
Population : consists of ALL subjects/members/element (human or otherwise)
that are being studied
Sample

: group of subjects selected from population

Sampling frame: the LIST of population members

Variable

: characteristic or attribute of interest in a population/sample.

Ex: Gender, marital status, age, weight, income

Data

: the values that can be obtained from measurements or observations

7

Statistical Terms
POPULATION

SAMPLE

All Items of
Interest

Portion of
Population

CENSUS

SAMPLE SURVEY

if the study is
carried out using
the whole
population

P in Population
& Parameter
S in Sample
& Statistic

involved a subgroup
(or sample) of a
population being
chosen

Parameter

Statistic

summary measure
for the entire
population

summary measure
computed from
sample data

Pilot Study:
a small survey
taken in advance
before a major
observation

SOURCE OF DATA
PRIMARY

First hand data

Collected by the investigator
Ex: interview respondents, survey, experiment
Advantage more accurate and consistent
Able to explain how the data are collected and the
limitation used
Disadvantage - Requires more time, manpower,
high cost

Taken from other investigators collection of figures

Data collected from other parties
Ex : Bank Negara, Statistics Department

SECONDARY

Advantage - 1) easily accessible from the internet,

journals, books, annual report etc., 2) inexpensive, less
time to collect
Disadvantage - 1) lack accuracy because method of
data collection are not explained, 2) biased original
purpose of data collection is not known
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Example 1
Advance Co. has established a new service to the customers

called a "help-line". Customers can call the help-line on any

matter related to the company and the products. Advance
Co. wants to investigate the effectiveness of the help-line
among the customers who have purchased their products.
The company intends to obtain a sample of 200 customers
using the warranty cards. The warranty cards contain
information about the products purchased, the telephone
numbers and the addresses of the customers. The
categories of products and percentage of the warranty
cards in each category are as follows:
Categories Of Product
Washing Machines
Refrigerators
Vacuum Cleaners
Food Processors
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% Of Warranty Cards
40%
30%
20%
10%

Example 1questions
i) What is the population under study?
ii) What is the sampling frame?
iii) What is the variable to be measured?

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Example 1.solution
i) What is the population under study?
A: ALL customers who have purchased the Advance
Co. products
ii) What is the sampling frame?
A: LIST of Advance Co. customers in warranty cards
iii) What is the variable to be measured?
A: Effectiveness of helpline

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Types of variables
Variable

Quantitative

Discrete (e.g.,
number of
houses, cars,
accidents)

Continuous
(e.g., length,
age, height,
weight, time)

Qualitative or
categorical (e.g.,
make of a computer,
hair color, gender)

13

Levels of Measurement
When we observe and record a

variable, it has characteristics

that influence the type of
statistical analysis that we can
perform on it.

Nominal

Lowest
scale

Ordinal

to

The first step in any statistical

analysis is to determine the

level of measurement; it tells us
what statistical tests can and
cannot be performed

Interval
highest
scale

Ratio
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Nominal Scales

Nominal:
- Represent observations that can be categorized,
do not have a meaningful numeric value
- Examples:
Gender
Religion
Nationality
Favorite colour
Number on a football jersey
Note:
The values cannot be compared to see if one is larger than the other
Cannot calculate the MEAN

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Ordinal Scales

Ordinal:

Represent observations that can be categorized and rank ordered

The values can be compared to see if one is larger or smaller than

the other
Examples:
Consumer satisfaction ratings
Military rank

Private, Lieutenant, Captain, General

Class ranking

Grade (A, B, C, D, E, F)
Note:
cannot assume the differences between adjacent scale values are
equal
cannot make this assumption even if the labels are number, not
words
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Interval Scales
Interval:
Represent observations that can be categorized, rank
ordered, and have an unit of measure

An unit of measure implies that the difference between any two

successive values is identical

Examples:
- Farenheit temperature scale, shoe size
Note:

Can be added or subtracted (cannot be multiplied or divided)

No true zero point (the value 0 does not represent the
complete absence of the variable)

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Ratio Scales

Ratio:
Highest and most informative scale
Observations that can be categorized, rank ordered, have
an unit measure and have a true zero (an absolute zero
point)
The true zero implies that a value zero represents the
complete absence of the variable
Examples:
amount of money zero money indicates the absence of money
Weight, height, time
Note: Can be multiplied or divided

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Example 2
Traffic offence is a growing concern at Dewan
Bandaraya in Kuala Lumpur. A study was
conducted to determine the profile of these traffic
offenders. A researcher from this office collected
data on the age, gender, race, types of offence, the
amount of fine paid and the years of driving
experience from a sample of traffic offenders as
they entered the building to pay their fines. The
researcher also checked the office database to
obtain the number of traffic offences by these
drivers.

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Example 2.cont.
i)

State the population for the above study.

ii) Is the above study a census study or sample study?
iii) Was any secondary data used for the above study?
If there was, please state the data.
iv) State the variable (s) and measurement scale from
this study.
v) What is the most suitable data collection method?
Give ONE (1) advantage and ONE (1) disadvantage of
this method.
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Example 2.solution
i)
State the population for the above study.
A: ALL the traffic offenders in K.L.
ii) Is the above study a census study or sample study?
A: Sample
iii) Was any secondary data used for the above study? If
there was, please state the data.
A: Yes. Number of traffic offense by the drivers

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Example 2.solution
iv) State the variable(s) and measurement scale from this
study.

A:

Variable

Level of measurement

Age

Ratio

Gender

Nominal

Race

Nominal

Types of offence

Nominal

Amount of fine paid

Ratio

Years of driving experience

Ratio

v) What is the most suitable data collection method? Give

ONE (1) advantage and ONE (1) disadvantage of this
method.
Method
Advantage
Disadvantage
A:
Personal interview Higher response
rate
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expensive