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Chapter 1 Chapter 1
Data and Statistics Data and Statistics
I need I need
help! help!
Applications in usiness and !conomics Applications in usiness and !conomics
Data Data
Data Sources Data Sources
Descripti"e Statistics Descripti"e Statistics
Statistical In#erence Statistical In#erence
Computers and Computers and
Statistical Anal$sis Statistical Anal$sis
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Applications in Applications in
usiness and !conomics usiness and !conomics
Accountin% Accountin%
!conomics !conomics
&u'lic accountin% #irms use statistical &u'lic accountin% #irms use statistical
samplin% procedures (hen conductin% samplin% procedures (hen conductin%
audits #or their clients) audits #or their clients)
!conomists use statistical in#ormation !conomists use statistical in#ormation
in ma*in% #orecasts a'out the #uture o# in ma*in% #orecasts a'out the #uture o#
the econom$ or some aspect o# it) the econom$ or some aspect o# it)
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Applications in Applications in
usiness and !conomics usiness and !conomics
A "ariet$ o# statistical ,ualit$ A "ariet$ o# statistical ,ualit$
control charts are used to monitor control charts are used to monitor
the output o# a production process) the output o# a production process)
&roduction &roduction
!lectronic point !lectronic point- -o# o#- -sale scanners at sale scanners at
retail chec*out counters are used to retail chec*out counters are used to
collect data #or a "ariet$ o# mar*etin% collect data #or a "ariet$ o# mar*etin%
research applications) research applications)
-ar*etin% -ar*etin%
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Applications in Applications in
usiness and !conomics usiness and !conomics
/inancial ad"isors use price /inancial ad"isors use price- -earnin%s ratios and earnin%s ratios and
di"idend $ields to %uide their in"estment di"idend $ields to %uide their in"estment
recommendations) recommendations)
/inance /inance
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Data and Data Sets Data and Data Sets
Data Data are the #acts and #i%ures collected0 summari1ed0 are the #acts and #i%ures collected0 summari1ed0
anal$1ed0 and interpreted) anal$1ed0 and interpreted)
The data collected in a particular stud$ are re#erred The data collected in a particular stud$ are re#erred
to as the to as the data set data set))
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The The elements elements are the entities on (hich data are are the entities on (hich data are
collected) collected)
A A "aria'le "aria'le is a characteristic o# interest #or the elements) is a characteristic o# interest #or the elements)
The set o# measurements collected #or a particular The set o# measurements collected #or a particular
element is called an element is called an o'ser"ation o'ser"ation))
The total num'er o# data "alues in a data set is the The total num'er o# data "alues in a data set is the
num'er o# elements multiplied '$ the num'er o# num'er o# elements multiplied '$ the num'er o#
"aria'les) "aria'les)
!lements0 3aria'les0 and 4'ser"ations !lements0 3aria'les0 and 4'ser"ations
.
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Stoc* Annual !arn/ Stoc* Annual !arn/
!6chan%e Sales78-9 Share789 !6chan%e Sales78-9 Share789
Data0 Data Sets0 Data0 Data Sets0
!lements0 3aria'les0 and 4'ser"ations !lements0 3aria'les0 and 4'ser"ations
Compan$ Compan$
Dataram Dataram
!ner%$South !ner%$South
:e$stone :e$stone
;andCare ;andCare
&s$chemedics &s$chemedics
A-!< A-!< 5+)10 5+)10 0)=2 0)=2
4TC 4TC 5.)00 5.)00 1)25 1)25
>?S! >?S! +25)50 +25)50 0)=2 0)=2
>?S! >?S! 111).0 111).0 0)++ 0)++
A-!< A-!< 15)20 15)20 0)1+ 0)1+
3aria'les 3aria'les
!lement !lement
>ames >ames
Data Set Data Set
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Scales o# -easurement Scales o# -easurement
The scale indicates the data summari1ation and The scale indicates the data summari1ation and
statistical anal$ses that are most appropriate) statistical anal$ses that are most appropriate)
The scale determines the amount o# in#ormation The scale determines the amount o# in#ormation
contained in the data) contained in the data)
Scales o# measurement include@ Scales o# measurement include@
>ominal >ominal
4rdinal 4rdinal
Inter"al Inter"al
Aatio Aatio
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Scales o# -easurement Scales o# -easurement
>ominal >ominal
A A nonnumeric la'el nonnumeric la'el or or numeric code numeric code ma$ 'e used) ma$ 'e used)
Data are Data are la'els or names la'els or names used to identi#$ an used to identi#$ an
attri'ute o# the element) attri'ute o# the element)
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!6ample@ !6ample@
Students o# a uni"ersit$ are classi#ied '$ the Students o# a uni"ersit$ are classi#ied '$ the
school in (hich the$ are enrolled usin% a school in (hich the$ are enrolled usin% a
nonnumeric la'el such as usiness0 Cumanities0 nonnumeric la'el such as usiness0 Cumanities0
!ducation0 and so on) !ducation0 and so on)
Alternati"el$0 a numeric code could 'e used #or Alternati"el$0 a numeric code could 'e used #or
the school "aria'le 7e)%) 1 denotes usiness0 the school "aria'le 7e)%) 1 denotes usiness0
2 denotes Cumanities0 + denotes !ducation0 and 2 denotes Cumanities0 + denotes !ducation0 and
so on9) so on9)
Scales o# -easurement Scales o# -easurement
>ominal >ominal
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Scales o# -easurement Scales o# -easurement
4rdinal 4rdinal
A A nonnumeric la'el nonnumeric la'el or or numeric code numeric code ma$ 'e used) ma$ 'e used)
The data ha"e the properties o# nominal data and The data ha"e the properties o# nominal data and
the the order or ran* o# the data is meanin%#ul order or ran* o# the data is meanin%#ul))
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Scales o# -easurement Scales o# -easurement
4rdinal 4rdinal
!6ample@ !6ample@
Students o# a uni"ersit$ are classi#ied '$ their Students o# a uni"ersit$ are classi#ied '$ their
class standin% usin% a nonnumeric la'el such as class standin% usin% a nonnumeric la'el such as
/reshman0 Sophomore0 Dunior0 or Senior) /reshman0 Sophomore0 Dunior0 or Senior)
Alternati"el$0 a numeric code could 'e used #or Alternati"el$0 a numeric code could 'e used #or
the class standin% "aria'le 7e)%) 1 denotes the class standin% "aria'le 7e)%) 1 denotes
/reshman0 2 denotes Sophomore0 and so on9) /reshman0 2 denotes Sophomore0 and so on9)
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Scales o# -easurement Scales o# -easurement
Inter"al Inter"al
Inter"al data are Inter"al data are al(a$s numeric al(a$s numeric))
The data ha"e the properties o# ordinal data0 and The data ha"e the properties o# ordinal data0 and
the inter"al 'et(een o'ser"ations is e6pressed in the inter"al 'et(een o'ser"ations is e6pressed in
terms o# a #i6ed unit o# measure) terms o# a #i6ed unit o# measure)
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Scales o# -easurement Scales o# -easurement
Inter"al Inter"al
!6ample@ !6ample@
-elissa has an SAT score o# 12050 (hile :e"in -elissa has an SAT score o# 12050 (hile :e"in
has an SAT score o# 10B0) -elissa scored 115 has an SAT score o# 10B0) -elissa scored 115
points more than :e"in) points more than :e"in)
=
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Scales o# -easurement Scales o# -easurement
Aatio Aatio
The data ha"e all the properties o# inter"al data The data ha"e all the properties o# inter"al data
and the and the ratio o# t(o "alues is meanin%#ul ratio o# t(o "alues is meanin%#ul))
3aria'les such as distance0 hei%ht0 (ei%ht0 and time 3aria'les such as distance0 hei%ht0 (ei%ht0 and time
use the ratio scale) use the ratio scale)
This This scale must contain a 1ero "alue scale must contain a 1ero "alue that indicates that indicates
that nothin% e6ists #or the "aria'le at the 1ero point) that nothin% e6ists #or the "aria'le at the 1ero point)
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Scales o# -easurement Scales o# -easurement
Aatio Aatio
!6ample@ !6ample@
-elissaEs colle%e record sho(s +2 credit hours -elissaEs colle%e record sho(s +2 credit hours
earned0 (hile :e"inEs record sho(s 52 credit earned0 (hile :e"inEs record sho(s 52 credit
hours earned) :e"in has t(ice as man$ credit hours earned) :e"in has t(ice as man$ credit
hours earned as -elissa) hours earned as -elissa)
B
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Data can 'e #urther classi#ied as 'ein% ,ualitati"e Data can 'e #urther classi#ied as 'ein% ,ualitati"e
or ,uantitati"e) or ,uantitati"e)
The statistical anal$sis that is appropriate depends The statistical anal$sis that is appropriate depends
on (hether the data #or the "aria'le are ,ualitati"e on (hether the data #or the "aria'le are ,ualitati"e
or ,uantitati"e) or ,uantitati"e)
In %eneral0 there are more alternati"es #or statistical In %eneral0 there are more alternati"es #or statistical
anal$sis (hen the data are ,uantitati"e) anal$sis (hen the data are ,uantitati"e)
Fualitati"e and Fuantitati"e Data Fualitati"e and Fuantitati"e Data
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Fualitati"e Data Fualitati"e Data
;a'els or names ;a'els or names used to identi#$ an attri'ute o# each used to identi#$ an attri'ute o# each
element element
4#ten re#erred to as 4#ten re#erred to as cate%orical data cate%orical data
Gse either the nominal or ordinal scale o# Gse either the nominal or ordinal scale o#
measurement measurement
Can 'e either numeric or nonnumeric Can 'e either numeric or nonnumeric
Appropriate statistical anal$ses are rather limited Appropriate statistical anal$ses are rather limited
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Fuantitati"e Data Fuantitati"e Data
Fuantitati"e data indicate Fuantitati"e data indicate ho( man$ or ho( much@ ho( man$ or ho( much@
discrete discrete0 i# measurin% ho( man$ 0 i# measurin% ho( man$
continuous continuous0 i# measurin% ho( much 0 i# measurin% ho( much
Fuantitati"e data are Fuantitati"e data are al(a$s numeric al(a$s numeric))
4rdinar$ arithmetic operations are meanin%#ul #or 4rdinar$ arithmetic operations are meanin%#ul #or
,uantitati"e data) ,uantitati"e data)
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Scales o# -easurement Scales o# -easurement
Fualitati"e Fualitati"e Fuantitati"e Fuantitati"e
>umerical >umerical >umerical >umerical >onnumerical >onnumerical
Data Data
>ominal >ominal 4rdinal 4rdinal >ominal >ominal 4rdinal 4rdinal Inter"al Inter"al Aatio Aatio
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Cross Cross- -Sectional Data Sectional Data
Cross Cross- -sectional data sectional data are collected at the same or are collected at the same or
appro6imatel$ the same point in time) appro6imatel$ the same point in time)
!6ample !6ample@ data detailin% the num'er o# 'uildin% @ data detailin% the num'er o# 'uildin%
permits issued in Dune 200+ in each o# the counties permits issued in Dune 200+ in each o# the counties
o# 4hio o# 4hio
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Time Series Data Time Series Data
Time series data Time series data are collected o"er se"eral time are collected o"er se"eral time
periods) periods)
!6ample !6ample@ data detailin% the num'er o# 'uildin% @ data detailin% the num'er o# 'uildin%
permits issued in ;ucas Count$0 4hio in each o# permits issued in ;ucas Count$0 4hio in each o#
the last +2 months the last +2 months
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Data Sources Data Sources
!6istin% Sources !6istin% Sources
Within a #irm Within a #irmHH almost an$ department almost an$ department
usiness data'ase ser"ices usiness data'ase ser"ices HH Do( Dones I Co) Do( Dones I Co)
Jo"ernment a%encies Jo"ernment a%encies - - G)S) Department o# ;a'or G)S) Department o# ;a'or
Industr$ associations Industr$ associations HH Tra"el Industr$ Association Tra"el Industr$ Association
o# America o# America
Special Special- -interest or%ani1ations interest or%ani1ations HH Jraduate -ana%ement Jraduate -ana%ement
Admission Council Admission Council
Internet Internet HH more and more #irms more and more #irms
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Statistical Studies Statistical Studies
Data Sources Data Sources
In In e6perimental studies e6perimental studies the "aria'les o# interest the "aria'les o# interest
are #irst identi#ied) Then one or more #actors are are #irst identi#ied) Then one or more #actors are
controlled so that data can 'e o'tained a'out ho( controlled so that data can 'e o'tained a'out ho(
the #actors in#luence the "aria'les) the #actors in#luence the "aria'les)
In In o'ser"ational o'ser"ational 7none6perimental9 7none6perimental9 studies studies no no
attempt is made to control or in#luence the attempt is made to control or in#luence the
"aria'les o# interest) "aria'les o# interest)
a sur"e$ is a a sur"e$ is a
%ood e6ample %ood e6ample
1+
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Data Ac,uisition Considerations Data Ac,uisition Considerations
Time Ae,uirement Time Ae,uirement
Cost o# Ac,uisition Cost o# Ac,uisition
Data !rrors Data !rrors
KK Searchin% #or in#ormation can 'e time consumin%) Searchin% #or in#ormation can 'e time consumin%)
KK In#ormation ma$ no lon%er 'e use#ul '$ the time it In#ormation ma$ no lon%er 'e use#ul '$ the time it
is a"aila'le) is a"aila'le)
KK 4r%ani1ations o#ten char%e #or in#ormation e"en 4r%ani1ations o#ten char%e #or in#ormation e"en
(hen it is not their primar$ 'usiness acti"it$) (hen it is not their primar$ 'usiness acti"it$)
KK Gsin% an$ data that happens to 'e a"aila'le or Gsin% an$ data that happens to 'e a"aila'le or
that (ere ac,uired (ith little care can lead to poor that (ere ac,uired (ith little care can lead to poor
and misleadin% in#ormation) and misleadin% in#ormation)
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Descripti"e Statistics Descripti"e Statistics
Descripti"e statistics Descripti"e statistics are the ta'ular0 %raphical0 and are the ta'ular0 %raphical0 and
numerical methods used to numerical methods used to summari1e summari1e data) data)
1.
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!6ample@ Cudson Auto Aepair !6ample@ Cudson Auto Aepair
The mana%er o# Cudson Auto The mana%er o# Cudson Auto
(ould li*e to ha"e a 'etter (ould li*e to ha"e a 'etter
understandin% o# the cost understandin% o# the cost
o# parts used in the en%ine o# parts used in the en%ine
tune tune- -ups per#ormed in the ups per#ormed in the
shop) She e6amines 50 shop) She e6amines 50
customer in"oices #or tune customer in"oices #or tune- -ups) The costs o# parts0 ups) The costs o# parts0
rounded to the nearest dollar0 are listed on the ne6t rounded to the nearest dollar0 are listed on the ne6t
slide) slide)
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B1 5= B+ 55 55 52 BB =0 B5 22
51 2B 52 =B 22 55 5B 55 52 52
10. 5. 22 2= B5 105 55 25 =0 10B
=5 B5 == 2= =+ 2= 51 2B 25 5.
22 =2 B= 101 5B 105 5B 2B 22 5+
!6ample@ Cudson Auto Aepair !6ample@ Cudson Auto Aepair
Sample o# &arts Cost #or 50 Tune Sample o# &arts Cost #or 50 Tune- -ups ups
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Ta'ular Summar$@ Ta'ular Summar$@
/re,uenc$ and &ercent /re,uenc$ /re,uenc$ and &ercent /re,uenc$
50 50- -5B 5B
20 20- -2B 2B
50 50- -5B 5B
=0 =0- -=B =B
B0 B0- -BB BB
100 100- -10B 10B
22
1+ 1+
12 12
55
55
55
50 50
..
22 22
+2 +2
1. 1.
1. 1.
10 10
100 100
72/509100 72/509100
&arts &arts
Cost 789 Cost 789
&arts &arts
/re,uenc$ /re,uenc$
&ercent &ercent
/re,uenc$ /re,uenc$
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Jraphical Summar$@ Cisto%ram Jraphical Summar$@ Cisto%ram
22
..
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==
10 10
12 12
1. 1.
12 12
1= 1=
Parts
Cost ($)
Parts
Cost ($)
F
r
e
q
u
e
n
c
y
F
r
e
q
u
e
n
c
y
505B 202B 505B =0=B B0BB 100-110 505B 202B 505B =0=B B0BB 100-110
Tune Tune- -up &arts Cost up &arts Cost
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>umerical Descripti"e Statistics >umerical Descripti"e Statistics
CudsonEs a"era%e cost o# parts0 'ased on the 50 CudsonEs a"era%e cost o# parts0 'ased on the 50
tune tune- -ups studied0 is 85B 7#ound '$ summin% the ups studied0 is 85B 7#ound '$ summin% the
50 cost "alues and then di"idin% '$ 509) 50 cost "alues and then di"idin% '$ 509)
The most common numerical descripti"e statistic The most common numerical descripti"e statistic
is the is the a"era%e a"era%e 7or 7or mean mean9) 9)
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Statistical In#erence Statistical In#erence
&opulation &opulation
Sample Sample
Statistical in#erence Statistical in#erence
Census Census
Sample sur"e$ Sample sur"e$
the set o# all elements o# interest in a the set o# all elements o# interest in a
particular stud$ particular stud$
a su'set o# the population a su'set o# the population
the process o# usin% data o'tained the process o# usin% data o'tained
#rom a sample to ma*e estimates #rom a sample to ma*e estimates
and test h$potheses a'out the and test h$potheses a'out the
characteristics o# a population characteristics o# a population
collectin% data #or a population collectin% data #or a population
collectin% data #or a sample collectin% data #or a sample
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&rocess o# Statistical In#erence &rocess o# Statistical In#erence
11) &opulation ) &opulation
consists o# all consists o# all
tune tune- -ups) A"era%e ups) A"era%e
cost o# parts is cost o# parts is
un*no(n un*no(n)
22) A sample o# 50 ) A sample o# 50
en%ine tune en%ine tune- -ups ups
is e6amined) is e6amined)
++) The sample data ) The sample data
pro"ide a sample pro"ide a sample
a"era%e parts cost a"era%e parts cost
o# 85B per tune o# 85B per tune- -up) up)
..) The sample a"era%e ) The sample a"era%e
is used to estimate the is used to estimate the
population a"era%e) population a"era%e)
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Computers and Statistical Anal$sis Computers and Statistical Anal$sis
Statistical anal$sis o#ten in"ol"es (or*in% (ith Statistical anal$sis o#ten in"ol"es (or*in% (ith
lar%e amounts o# data lar%e amounts o# data))
Computer so#t(are Computer so#t(are is t$picall$ used to conduct the is t$picall$ used to conduct the
anal$sis) anal$sis)
Statistical so#t(are pac*a%es such as Statistical so#t(are pac*a%es such as -icroso#t !6cel -icroso#t !6cel
and and -inita' -inita' are capa'le o# data mana%ement0 anal$sis0 are capa'le o# data mana%ement0 anal$sis0
and presentation) and presentation)
Instructions #or usin% !6cel and -inita' are pro"ided Instructions #or usin% !6cel and -inita' are pro"ided
in chapter appendices) in chapter appendices)
1=
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!nd o# Chapter 1 !nd o# Chapter 1