What is Statistics. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 1-2 Lecture Goals After completing this theme, you should

What is Statistics

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 1-2

Lecture Goals

After completing this theme, you should be able to:

Explain how decisions are often based on incomplete information

Explain key definitions: Population vs. Sample

Parameter vs. Statistic

Descriptive vs. Inferential Statistics

Describe random sampling Explain the difference between Descriptive and

Inferential statistics

What is Statistics

• Most people become familiar with probability and statistics through radio, television, newspapers, and magazines. For example, you can find and hear the following statements in a newspaper or magazine:

Barack Obama wants to restrict banks that “are too big to fail”, limiting the size of a bank to holding no more than 10% of the share of insured deposits

What is Statistics

• Public debt average annual rate of growth was nearly 10 per cent during last decade

• Interest rates on deposits of individuals in foreign countries are below 3%, while in Russia, these rates on average are higher than 6%

What is Statistics

• Nearly one in 10 people in the USA wears contact lenses

• Statistics is used in almost all fields of human endeavor. In education, for example, the researcher might want to know if new methods of teaching are better than old ones

What is Statistics

• In other areas, such as public health, an administrator would be concerned with the number of residents who contract a new strain of flu virus during a certain year. There are a few examples of how statistics can be used in various occupations.

• Furthermore, statistics is used to analyze the results of surveys and as tool in scientific research to make decisions based on controlled experiments. Other uses of statistics include operations research, quality control, estimation, and prediction

What is Statistics

The word "statistics" comes from the Latin word status - the status, the status quo


Dealing with Uncertainty

Everyday decisions are based on incomplete information

Consider:

The price of IBM stock will be higher in six months than it is now.

If the federal budget deficit is as high as predicted, interest rates will remain high for the rest of the year


Dealing with Uncertainty

Because of uncertainty, the statements should be modified:

The price of IBM stock is likely to be higher in six months than it is now.

If the federal budget deficit is as high as predicted, it is probable that interest rates will remain high for the rest of the year

Students study statistics for several reasons:

1-The student as well as the professional person must be able to read and understand the various statistical studies performed in his or her field. To have this understanding, the person must be knowledgeable about the vocabulary, symbols, concepts, and statistical procedures used in these studies


2-The student or professional person might be called upon to conduct research in his or her field; and science statistical procedures are basic to all research, such statistical knowledge will be necessary


3 - In doing statistical studies, the researcher must be able to summarize the data, draw general conclusions, and, if necessary, make reliable predictions or forecasts for future use


Key Definitions

A роpulation A sample

A parameter A statistic


Key Definitions

A роpulation <=> A parameter A sample <=> A statistic


Key Definitions

A population is the collection of all items of interest or under investigation. A population is the totality of all subjects possessing certain common characteristics that are being studied

N represents the population size

A sample is an observed subset of the population. A sample is a subgroup or subset of the population

n represents the sample size

English plus Russian

• Russian for

A population is

Генеральная совокупность

• Russian for

A sample is

Выборка, выборочная совокупность


Key Definitions

A parameter is a specific characteristic of a population

A statistic is a specific characteristic of a sample


Population vs. Sample

a b c d

ef gh i jk l m n

o p q rs t u v w

x y z

Population Sample

b c

g i n

o r u

y

Values calculated using population data are called parameters

Values computed from sample data are called statistics


Examples of Populations

Names of all registered voters in the United

States

Incomes of all families living in Daytona Beach

Annual returns of all stocks traded on the New

York Stock Exchange

Grade point averages of all the students in our

university


Random Sampling

Simple random sampling is a procedure in which each member of the population is chosen strictly by

chance, each member of the population is equally likely to be

chosen, and every possible sample of n objects is equally likely to

be chosen

The resulting sample is called a random sample

Descriptive vs. Inferential Statistics

• Statistics includes two main areas: inferential statistics and descriptive statistics


Two branches of statistics

Descriptive statistics:

Organizing, collecting, summarizing, and processing data to transform data into information (presentation of data)

In descriptive statistics the statistician tries to describe a situation, using statistical and mathematical methods


Two branches of statistics

Inferential statistics: provide the bases for predictions, forecasts, and

estimates that are used to transform information into

knowledge


Descriptive Statistics

Collect data e.g., Survey

Present data e.g., Tables and graphs

Summarize data e.g., Sample mean =

iX

n


Inferential Statistics

Inferential or analytic statistics consists of generalizing from samples to populations, performing hypothesis testing, determining relationships among variables, and making prediction

Here, the statistician tries to make inferences from samples to populations


Inferential Statistics

Estimation e.g., Estimate the population

mean weight using the sample mean weight

Hypothesis testing e.g., Test the claim that the

population mean weight is 120 pounds

Inference is the process of drawing conclusions or making decisions about a population based on

sample results


The Decision Making Process

Begin Here:

Identify the Problem

Data

Information

Knowledge

Decision

Descriptive Statistics,Probability, Computers

Experience, Theory,Literature, InferentialStatistics, Computers


Chapter Summary

Reviewed incomplete information in decision making

Introduced key definitions: Population vs. Sample Parameter vs. Statistic Descriptive vs. Inferential statistics

Described random sampling Examined the decision making process

The End

• Thank you for your kind attention

Documents

What is Statistics. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 1-2 Lecture Goals After completing this theme, you should