INTRODUCTION TO APPLIED

STATISTICS

CONTENT
1.1 What is statistics?
1.2 Need for Statistics
1.3 Statistical Problem Solving Methodology
1.4 Role of Computer in Statistics

OBJECTIVE
By the end of this module, you should be able to
Define the meaning of statistics, population, sample,

parameter, statistic, descriptive statistics and inferential

statistics.
Understand and explain why a knowledge of statistics is
needed
Outline the basic steps in the statistical problem solving
methodology.
Identifies various method to obtain samples
Discuss the role of computers and data analysis software in
statistical work.

1.1 What is Statistics?

Most people become familiar with probability and statistics
through radio, television, newspapers, and magazines. For
example, the following statements were found in newspapers
Philippines in Figures Population (August 2007) 88.57M Projected Population
(2009) 92.23M Inflation Rate (December 2008) 8.0% Balance of Trade (October 2008)
$-606M Exports (October 2008) $3.968B Imports (October 2008)
$4.577B Unemployment (October 2008) 6.8% Underemployment (October 2008)
17.5% Simple Literacy (2000) 92.3% Functional Literacy (2003) 84% Average Family
Income (2006) P173,000 GNP (Q2 2008) P2,040.7B GDP (Q2 2008) P1,834.2B

collection

presentation

(s.) a branch of knowledge

(a science)

analysis

interview
questionnaire
observation
records
textual
tabular
graphical
univariate
bivariate
multivariate

STATISTICS
Interpretation
nominal
(pl.) data

ordinal
interval
ratio

of data

narrow
broad

Central Tendency
(Central Location)

Mean
Median
Mode

Variability/Dispersion
(spreading)
Quartiles
Position
Deciles
Percentiles
Descriptive
STATISTICAL
METHODS

Mean Deviation
Variance/
Standard Deviation

Symmetry
Skewness
peakedness
Kurtosis (height at the middle)

Configuration (Shape)

Regression
(prediction)

flatness

Simple

Correlation
(relationships)

Inferential

Range

Multiple
Simple
Multiple

Estimation of Parameters

Point--estimation
Point
Interval estimation

Hypothesis--Testing
Hypothesis

Parametric
Non--parametric
Non

PSA Summer Institute

Statistics

is the science of conducting

studies to collect, organize,
summarize, analyze,
present, interpret and draw
conclusions from data.
Any values (observations or
measurements) that have been collected

The basic idea behind all statistical methods of data

analysis is to make inferences about a population by
studying small sample chosen from it

Population
The totality of observations
outcomes, object or individual
under study
Tangible
Always finite & after a population is sampled,
the population size decrease by 1
The total number of members is fixed &
could be listed

Sample
A subset of a population,
containing the objects or outcomes
that are actually observed

Parameter
Any numerical values that
describes a population
characteristics
Conceptual
Population that consists of all the
value that might possibly have been
observed & has an unlimited number
of members

Statistic
Any numerical values that
describes a sample
characteristics

Descriptive & Inferential Statistics

Descriptive statistics
consists of the collection,

organization, classification,
summarization, and
presentation of data obtain
from the sample.
Used to describe the
characteristics of the
sample
Used to determine
whether the sample
represent the target
population by comparing
sample statistic and
population parameter

Inferential statistics
consists of generalizing from
samples to populations,
performing estimations
hypothesis testing,
determining relationships
among variables, and making
predictions.
Used when we want to draw a
conclusion for the data obtain
from the sample
Used to describe, infer,
estimate, approximate the
characteristics of the target
population

An overview of descriptive
statistics and statistical
inference

Descriptive
Statistics
Yes
No

Statistical
Inference

1.2 Need for Statistics

It is a fact that, you need a knowledge of

statistics to help you
1. Describe and understand numerical relationship
2. Make better decision

Describing relationship between

variables
1.

A management consultant wants to compare a clients

investment return for this year with related figures from last
year. He summarizes masses of revenue and cost data from
both periods and based on his findings, presents his
recommendations to his client.

2.

A college admission director needs to find an effective way

of selecting student applicants. He design a statistical study
to see if theres a significance relationship between SPM
result and the gpa achieved by freshmen at his school. If
there is a strong relationship, high SPM result will become an
important criteria for acceptance.

Aiding in Decision Making

1.

Suppose that the manager of Big-Wig Executive Hair Stylist, Hugo

Bald, has advertised that 90% of the firms customers are satisfied
with the companys services. If Pamela, a consumer activist, feels
that this is an exaggerated statement that might require legal
action, she can use statistical inference techniques to decide
whether or not to sue Hugo.

2.

Students and professional people can also use the knowledge

gained from studying statistics to become better consumers and
citizens. For example, they can make intelligent decisions about
what products to purchase based on consumer studies about
government spending based on utilization studies, and so on.

1.3 Statistical problem solving

Methodology
6 Basic Steps
1. Identifying the problem or opportunity
2. Deciding on the method of data collection
3. Collecting the data
4. Classifying and summarizing the data
5. Presenting and analyzing the data
6. Making the decision

STEP 1
Identifying the problem or
opportunity
Must clearly understand & correctly define exactly what it is

that the study is to accomplish

If not, time & effort are waste

Is the goal to study some population?

Is it to impose some treatment on the group & then gauge the

response?
Can the study goal be achieved through mere counts or
measurements of the group?
Must an experiment be performed on the group?
If sample are needed, how large?, how should they be taken?

STEP 2
Deciding on the Method of Data
Collection

Data must be gathered that are accurate, as

complete as possible & relevant to the problem

Data can be obtained in 3 ways

1. Data that are made available by others (internal,

external, primary or secondary data)

2. Data resulting from an experiment (experimental
study)
3. Data collected in an observational study
(observation, survey, questionnaire)

STEP 3
Collecting the data
Nonprobability data
Is one in which the judgment of the experimenter,

the method in which the data are collected or

other factors could affect the results of the sample

Probability data
Is one in which the chance of selection of each

item in the population is known before the sample

is picked

Nonprobability data samples

Judgment samples

Base on opinion of one or more expert person

Ex: A political campaign manager intuitively picks certain

voting districts as reliable places to measure the public

opinion of his candidate

Voluntary samples

Question are posed to the public by publishing them over

radio or tv (phone or sms)

Convenience samples

Take an easy sample

Ex: A surveyor will stand in one location & ask passerby

their questions

Probability data samples

Random samples
Selected using chance method or random methods
Systematic samples
Numbering each subject of the populations & select every kth
number
Stratified samples
Dividing the population into groups according some characteristic
that is important to the study, then sampling from each group
Cluster samples
Dividing the population into sections/clusters, then randomly select
some of those cluster & then chose all members from those selected
cluster

Identified the type of sampled obtain

Example 1
A physical education professor wants to study the
physical fitness levels of students at her university. There are
20,000 students enrolled at the university, and she wants to draw
a sample of size 100 to take a physical fitness test. She obtains a
list of all 20,000 students, numbered it from 1 to 20,000 and then
invites the 100 students corresponding to those numbers to
participate in the study.
Example 2
A quality engineer wants to inspect rolls of wallpaper in order
to obtain information on the rate at which flows in the printing are
occurring. She decides to draw a sample of 50 rolls of wallpaper from
a days production. Each hour for 5 hours, she takes the 10 most
recently produced rolls and counts the number of flaws on each. Is
this a simple random sample?

Example 3
Suppose we have a list of 1000 registered voters in a community and we
want to pick a probability sample of 50. We can use a random number table to
pick one of the first 20 voters (1000/50 = 20) on our list. If the table gave us the
number of 16, the 16th voter on the list would be the first to be selected. We
would then pick every 20th name after this random start (the 36th voter, the 56th
voter, etc) to produce a systematic sample.

Example 4
Consumer surveys of large cities often employ cluster sampling. The
usual procedure is to divide a map of the city into small blocks each blocks
containing a cluster are surveyed. A number of clusters are selected for the
sample, and all the households in a cluster are surveyed. Using a cluster
sampling can reduce cost and time. Less energy and money are expended if an
interviewer stays within a specific area rather than traveling across stretches of
the cities.

STEP 4
Classifying and Summarizing the
data
Organize or group the facts for study
Classifying- identifying items with like

characteristics & arranging them into groups or

classes
Ex: Production data (product make, location, production

process ext..)

Summarization
Graphical & Descriptive statistics ( tables, charts, measure

of central tendency, measure of variation, measure of

position)

Qualitative
(categorical/Attributes)
1* Data that refers only to

Types of
Data

name classification (done

using numbers)
2* Can be placed into
distinct categories
according to some
characteristic or attribute.

Quantitative
(Numerical)

Nominal Data (cant be rank)

Gender, race, citizenship. ext

Ordinal Data (can be rank)

Feeling (dislike like),
color (dark bright) , ext

Discrete Variables
Assume values that can be
counted and finite
Ex : no of something

1* Data that represent

counts or measurements
(can be count or measure)
2* Are numerical in nature
and can be ordered or
ranked.

Continuous variables
Can assume all values
between any two specific
values & it obtained by
measuring
Ex: weight, age, salary, height,
temperature, ext

Use code
numbers (1,
2,)

Example
The Lemon Marketing Corporation has asked you for information about the car
you drive. For each question, identify each of the types of data requested as
either attribute data or numeric data. When numeric data is requested,
identify the variable as discrete or continuous.
1.
2.
3.
4.
5.
6.
7.
8.

What is the weight of your car?

In what city was your car made?
How many people can be seated in your car?
Whats the distance traveled from your home to your school?
Whats the color of your car?
How many cars are in your household?
Whats the length of your car?
Whats the normal operating temperature (in degree Fahrenheit) of your cars
engine?
9. What gas mileage (miles per gallon) do you get in city driving?
10. Who made your car?
11. How many cylinders are there in your cars engine?
12. How many miles have you put on your cars current set of tyres?

Level of Measurements of Data

Nominal-level
data

Ordinal-level
data

Interval-level
data

Ratio-level
data

classifies data
into mutually
exclusive (non
overlapping),
exhausting
categories in
which no order or
ranking can be
imposed on the
data

classifies data
into categories
that can be
ranked;
however, precise
differences
between the
ranks do not
exist

ranks data, and

precise
differences
between units of
measure do exist;
however, there is
no meaningful
zero

Possesses all the

characteristics of
interval
measurement,
and there exists a
true zero.

Examples

STEP 5
Presenting and Analyzing the
data
Summarized & analyzed information given by

the graphical & descriptive statistics

Identify the relationship of the information
Making any relevant statistical inferences
(hypothesis testing, confidence interval,
anova, control charts, ext)

STEP 6
Making the decision
The analyst weighs the options in light of

established goals to arrive at the plan or

decision that represents the best solution to
the problem
The correctness of this choice depends on
analytical skill and information quality

START

Identify the problem or

opportunity

Gather available internal and

external facts relevant to the
problem

Are available facts

sufficient?

No

Gather new data from populations and

samples using instruments, interviews,
questionnaire, etc

Yes

Statistical
Problem
Solving
Methodology

Classify, summarize, and

process data using tables,
charts,, and numerical
descriptive measure

Present and communicate

summarized information in
form of tables, charts and
descriptive measure

Is information from
a sample?

Yes

Use sample information to

1. Estimate value of parameter
2. Test assumptions about
parameter

No
Use cencus information to
evaluate alternative courses of
action and make decisions

Interpret the results, draw

conclusions, and make decisions

STOP

1.4 Role of the Computer in

Statistics
Two software tools commonly used for data
analysis
1. Spreadsheets

Microsoft Excel

2. Statistical Packages

MINITAB, SAS, SPSS and AcaStat

Conclusion
The applications of

statistics are many and

varied. People
encounter them in
everyday life, such as in
reading newspapers or
magazines, listening to
the radio, or watching
television.

Thank You