STATISTICS

Lectured byAchmad Tohirin, Ph.D

Why Learning Statistics

Learning statistics will enable the decision maker to understand how to:

Present and describe informationDraw conclusion about the large

population based upon information from samples

Improve processesObtain reliable forecasts of

statistical variables of interest

Definition of Statistics

Horace Secrist:Aggregate of facts affected to a

marked extent by multiplicity of causes, numerically expressed, enumerated, or estimated according to reasonable standards of accuracy, collected in a systematic manner for predetermined purpose and placed in relation to each other

Statistical MethodSelingman:

◦Statistics is the science which deals with the methods of collecting, classifying, presenting, comparing and interpreting numerical data collected to throw some light on any sphere of enquiry.

Bowley:◦Statistics may be called the science of counting

and the science of averageCroxton & Cowden:

◦Statitistics may be defined as a science of collection, presentation, analysis and interpretation of numerical data.

Types of Statistical MethodDescriptive statisticsIt involves the collection, presentation, and

characterization of a set of data in order to describe the various features of that set of data. It includes:◦ Graphic methods

Bar charts Line graphs Pie charts

◦ Numeric measures Central tendency Dispersion Skewness Kurtosis

Inferential StatisticsIt includes statistical methods which facilitate

estimating the characteristic of a population or making decisions concerning a population on the basis of sample results.

Important concept of inferential statistics:◦A process is a set of conditions that repeatedly

come together to transform inputs into outcomes. business process to serve customer

◦A population (or universe) is a group of elements or observation relating to a phenomenon under study for which greater knowledge and understanding is needed

◦A statistical variable is an operationally defined characteristic of a population or process and represents the quantity to be observed or measured

◦A sample is a group of some, but not all, of the elements or observations of a population or process.

◦A parameter is a descriptive or summary measure (a numerical quantity) that describes characteristic of the entire population

◦A statistic is a numerical quantity that describes a sample drawn from a population

Example:Student’s pocket money

Importance & Scope Statistical methods are applicable in all

diversified fields such as economics, trade, industry, accountancy and auditing, etc.

In recent past, statistics has acquired its importance as a subject of study in the curricula of many other disciplines. ‘A knowledge of statistics is like a knowledge of foreign language or of algebra, it may prove of use at any time under any circumstances’. (Bowley)

Limitation of StatisticsStatistic does not study qualitative

phenomena.Statistics does not study

individualsStatistics can be misused.

Need for dataStatistical data are the basic material

needed to make an effective decision in a particular situation.

Reasons why data is needed◦To provide necessary inputs to a given

phenomenon or situation under study◦To measure the performance in an ongoing

process◦To enhance the quality of decision-making by

enumerating alternative course of action in a DMP and selecting an appropriate one.

◦To satisfy the desire to understand an unknown phenomenon

◦To assist in guessing the causes and probable effects of certain characteristics in given situation

Checking reliability of dataHave data come from an unbiased

source, that is, source should not have an interest in supplying the data that lead to a misleading conclusion

Do the data support other evidences already available? Is any evidence missing that may cause to arrive at a different conclusion?

Are data support the logical conclusions drawn? Hve we made conclusions which are not supported by data?

Types of DataCategorical Do you like sport?

Y/NNumerical:

◦Discretehow many…?Number◦Continuouswhat is…?cm, inch◦Remarks: discrete data are

numerical measurements that arise from a process of counting, while continuous data are numerical measurements that arise from process of measuring.

Sources of Data

The choice of data collection method from a particular source depends on:

The facilities availableThe extent of accuracy required in

analyses,The expertise of the investigatorThe time span of the study, and The amount of money and other

resources required for data collection.

Sources of data◦Primary data sources

Direct personal observation Direct or indirect oral interview Administrating questionnaires

◦Secondary data sources External secondary data sources

Govt publication Non-Govt publication …

Internal secondary data sourcesAdvantage vs disadvantage?