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Statistical Method and Data Analysis

INTRODUCTIONTO

STATISTICAL

METHODS&

DATAANALYSIS

What is Statistic?

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Why use Statistic?

Decision Makers Use Statistics To:

Present and describe business data andinformation properly

Draw conclusions about large groups ofindividuals or items, using information

collected from subsets of the individuals oritems.

Make reliable forecasts about a businessactivity

A branch of mathematics, taking andtransforming numbers into useful informationfor decision makers

Methods for processing & analyzing numbers

Methods for helping reduce the uncertaintyinherent in decision making

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Statistical Method

Descriptive statistics

Descriptive statistics comprises the statistical

methods dealing with the collection, tabulation

and summarization of data, so as to present

meaningful information

They are simply a way to describe our data

Collecting and describing data

Collect data

o e.g. Survey

Present data

o e.g. Tables and graphsCharacterize data

o e.g. Sample mean =

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Inferential statistics

Statistical inference, on the other hand,

consists of the methods involved with the

analysis and interpretation of data that will

enable the statistician to develop meaningful

inferences about the data

Drawing conclusions and/or making

o decisions concerning a population

based only on sample data

Estimationo

e.g.: Estimate the population meanweight using the sample meanweight

o Hypothesis testing

o e.g.: Test the claim that the

Statistical Method

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Drawing conclusions and/or makingdecisions

Type of Data

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Examples:

Marital Status

Political Party

Eye Color

(Defined categories)

Examples:

Number of Children

Defects per hour

(Counted items)

Examples:

Weight Voltage

(Measuredcharacteristics)

Population and Sample

Population

Sample

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Parametric & Non Parametric

Parametric

Non Parametric

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What is a Statistical

A statistical hypothesis is an assertion orconjecture concerning one or morepopulations.

The truth or falsity of the assertion isnever known with absolute certaintyunless we examine the entire

population.

Due to time and cost considerations,this option is rarely feasible.

Therefore we use SAMPLES and

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Tests of Hypotheses 9 Standard

1. Define the problem objective2. Formulate a null and alternative hypothesis3. Decide if the problem will be evaluated with a

one-tail or two-tail test4. Determine proper sample size to be taken.5. Determine the appropriate statistical test touse.6. Choose a critical value of a test statisticreflecting the

degree of uncertainty that can be tolerated(alpha risk).

7. Compute the calculated value of the teststatistic from

the sample information8. Compare the calculated value of the test

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Define the Problem Objective

KNOW what you want to prove (or disprove)BEFORE you do any data collection!

Start by completing the following sentence: Iam trying to prove that

Formulate the Null and Alternative

Hypotheses

The null (H0) and alternative (H1 or Ha)hypotheses are developed from theproblem statement.

The problem statement (what you are

trying to prove) becomes the alternativehypothesis.

The null hypothesis becomes what youare trying to disprove

Tests of Hypotheses

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One Tail Tests

If a test is established to determine whethera new population value is SMALLER orLARGER than the old population value, therisk of making an error in accepting Ha isplaced on only one end of the distribution:

Ho: NEW OLD Ho: NEW OLDHa:

NEW< OLD

Ha: NEW

> OLD

Tests of Hypotheses

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Two Tail Tests

If a test is established to determinewhether a new population value isDIFFERENT than the old population

value, the alpha risk is divided into twoparts:

Ho: NEW= OLD

Ha: NEW OLD

Tests of Hypotheses

Tests of Hypotheses

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