CHAPTER 1:INTRODUCTION

WHAT IS STATISTICS?DefinitionStatistics is a group of methods used to collect, analyze, present, and interpret data and to make decisions.

TYPES OF STATISTICSDefinitionDescriptive Statistics consists of methods for organizing, displaying, and describing data by using tables, graphs, and summary measures.

TYPES OF STATISTICSDefinitionInferential Statistics consists of methods that use sample results to help make decisions or predictions about a population.

POPULATION VERSUS SAMPLEDefinition A population consists of all elements individuals, items, or objects whose characteristics are being studied. The population that is being studied is also called the target population.

POPULATION VERSUS SAMPLE cont.DefinitionA portion of the population selected for study is referred to as a sample.

Figure 1.1 Population and sample.Population Sample

POPULATION VERSUS SAMPLE cont.Definition A survey that includes every number of the population is called a census. The technique of collecting information from a portion of the population is called a sample survey.

POPULATION VERSUS SAMPLE cont.DefinitionA sample that represents the characteristics of the population as closely as possible is called a representative sample.

POPULATION VERSUS SAMPLE cont.DefinitionA sample drawn in such a way that each element of the population has a chance of being selected is called a random sample. If the chance of being selected is the same for each element of the population, it is called a simple random sample.

BASIC TERMS Table 1.1 2001 Sales of Seven U.S. Companies

An element or a memberAn observation or measurementVariable

Company2001 Sales (millions of dollars)Wal-Mart StoresIBMGeneral MotorsDell ComputerProcter & GambleJC PenneyHome Depot217,79985,866177,26031,16839,26232,00453,553

BASIC TERMS cont.Definition An element or member of a sample or population is a specific subject or object (for example, a person, firm, item, state, or country) about which the information is collected.

BASIC TERMS cont.Definition A variable is a characteristic under study that assumes different values for different elements. In contrast to a variable, the value of a constant is fixed.

BASIC TERMS cont.DefinitionThe value of a variable for an element is called an observation or measurement.

BASIC TERMS cont.DefinitionA data set is a collection of observations on one or more variables.

TYPES OF VARIABLESQuantitative VariablesDiscrete VariablesContinuous VariablesQualitative or Categorical Variables

Quantitative VariablesDefinitionA variable that can be measured numerically is called a quantitative variable. The data collected on a quantitative variable are called quantitative data.

Quantitative Variables cont.DefinitionA variable whose values are countable is called a discrete variable. In other words, a discrete variable can assume only certain values with no intermediate values.

Quantitative Variables cont.DefinitionA variable that can assume any numerical value over a certain interval or intervals is called a continuous variable.

Qualitative or Categorical VariablesDefinitionA variable that cannot assume a numerical value but can be classified into two or more nonnumeric categories is called a qualitative or categorical variable. The data collected on such a variable are called qualitative data.

Figure 1.2 Types of variables.

Variable

Quantitative

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

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

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

CROSS-SECTION VERSUS TIME-SERIES DATACross-Section DataTime-Series Data

Cross-Section DataDefinitionData collected on different elements at the same point in time or for the same period of time are called cross-section data.

Table 1.2 2002 Net Worth of Six Persons

Name2002 Net Worth(billions of dollars)Bill GatesWarren BuffettHelen WaltonGeorge LucasTed TurnerRalph Lauren43.036.018.83.02.22.0

Time-Series DataDefinitionData collected on the same element for the same variable at different points in time or for different periods of time are called time-series data.

Table 1.3Price of a 30-Second TV Commercial During Super Bowl Telecast

YearSuper BowlPrice of a 30-Seconf TV Commercial (million dollars)19931994199519961997199819992000200120022003XXVIIXXVIIIXXIXXXXXXXIXXXIIXXXIIIXXXIVXXXVXXXVIXXXVII.85.901.001.101.201.301.602.102.051.902.20

SOURCES OF DATAData may be obtained from Internal sourcesExternal sourcesSurveys and experiments

SUMMATION NOTATIONExample 1-1Annual salaries (in thousands of dollars) of four workers are 75, 42, 125, and 61. Find x (x) x

Solution 1-1 x = x1 + x2 + x3 + x4 = 75 + 42 + 125 + 61 = 303 = $303,000 (x) = (303) = 91,809 x = (75) + (42) + (125) + (61) = 5625 + 1764 + 15,625 + 3721 = 26,735

Example 1-2The following table lists four pairs of m and f values:

Compute the following: m f mf mf

m12152030f591016

Solution 2-1 Table 1.4

mffmfmf121520305910165 x 5 = 259 x 9 = 8110 x 10 = 10016 x 16 = 25612 x 5 = 6015 x 9 = 13520 x 10 = 20030 x 16 = 48012 x 12 x 5 = 72015 x 15 x 9 = 202520 x 20 x 10 = 400030 x 30 x 16 = 14,400m = 77f = 40f = 462mf = 875mf = 21,145