Decision Sciences

Business Statistics 1
Basic Terms and The Role of Statistics in Business
Session 1
Eula Villar
Decision Sciences and Innovations Department
College of Business

Outline

Statistics in Practice why study statistics?

Population and Sample
Census and Survey
Primary and Secondary Data
Types of Variables
Scales of Measurement
Descriptive Statistics vs. Statistical Inference

Statistics in Practice
Accounting

Finance

Marketing

Production

Economics

Business
Research

Entrepreneurship

Data
Data are facts and figures collected, analyzed,
and summarized for presentation and
interpretation.
Data sets are data collected particularly for a
study

Elements
Variables
Observations

Element
Total Manufactures

2007
(Variable 1)
$42,803,999,580

2008
(Variable 2)
$40,976,461,529

2009
(Variable 3)
$32,974,938,296

2010
(Variable 4)
$44,662,514,142

2011
(Variable 5)
$39,175,193,042

- Electronic Products

$31,023,035,434

$28,500,910,005

$22,173,327,911

$31,079,478,195

$23,722,359,264

- Other Electronics
- Garments
- Textiles/Yarns and Fabrics
- Footwear

$1,150,732,340
$2,299,720,568
$203,868,461
$30,581,423

$1,426,219,849
$1,948,762,191
$194,143,939
$30,999,549

$1,417,174,284
$1,520,136,289
$146,544,895
$22,092,136

$1,472,812,123
$1,701,502,617
$169,388,664
$8,331,643

$1,447,550,199
$1,895,100,754
$183,624,065
$12,492,391

$103,799,539

$95,295,882

$65,801,612

$70,529,581

$40,144,663

$771,458,799
$241,162,291
$1,008,126,939

$918,384,082
$220,874,660
$1,123,246,115

$820,485,323
$138,344,746
$962,851,864

$1,028,745,335
$152,242,097
$1,533,891,505

$1,683,850,837
$165,185,703
$1,886,121,341

$217,386,413

$211,154,725

$156,398,335

$162,280,615

$176,895,137

$1,857,429,629

$2,099,944,158

$1,883,733,690

$2,571,917,128

$2,773,835,802

$735,025,376

$958,429,699

$850,607,087

$930,391,154

$1,033,284,613

$263,954,681

$261,530,754

$118,724,901

$154,486,219

$199,903,628

$152,192,456

$143,180,934

$127,957,629

$168,052,616

$186,633,938

$56,365,932

$41,991,187

$37,902,448

$43,239,409

$46,430,975

$341,976,736

$330,599,953

$290,820,435

$337,429,451

$423,353,695

$2,347,182,563

$2,470,793,847

$2,242,034,711

$3,077,795,790

$3,298,426,037

- Travel Goods and Handbags

- Wood Manufactures
- Furnitures and Fixtures
- Chemicals
- Non-Metallic Mineral
Manufactures
- Machinery and Transport
Equipment
- Processed Food and
Beverage
- Iron and Steel
- Baby Carr., Toys, Games and
Sporting Goods
- Basketwork, wickerwork, and
other articles of plaiting
materials
- Misc. Manufactured Articles,
n.e.s.
- Others

Observations

Scales of Measurement
Nominal Scale

Ordinal Scale

Interval Scale

Ratio Scale

Labels or
names are
used to
describe the
attribute of an
element

Data is
arranged
where order
or rank is
meaningful
Shows
properties of
nominal data

Shows
properties of
ordinal data
and interval
between
values is
expressed
using a fixed
unit of
measurement
Always
numerical

Shows
properties of
interval data
and ratio of
two values are
meaningful.
Scale requires
a zero value

Scales of Measurement
Scale
Nominal

Ordinal

Interval

Ratio

Properties
Indicates a Difference,
without any implied
ordering
Indicates a difference, and
indicates the direction of
the difference
(e.g., more or less than)

Indicates a Difference, with

directionality and amount
of difference in equal
intervals
Indicates a difference;
indicates the direction of
the difference, indicates the
amount of the difference in
equal intervals; indicates an
absolute zero

Examples
Religion: 1=catholic;
2=protestant; 3=Jewish;
4=muslim; 5=other
Attitude on a Subject:
1=strongly disagree,
2=disagree; 3=don't care /
don't know; 4=agree;
5=strongly agree
Temperature in Celsius
Occupational Prestige
(12-96)

Temperature in Kelvin
Income
Years of Schooling

Variables
A variable is not only something that we measure, but
also something that we can manipulate and something
we can control for.
A variable is any characteristic, number,
or quantity that can be measured or counted. A
variable may also be called a data item. Age, sex,
business income and expenses, country of birth, capital
expenditure, class grades, eye colour and vehicle type
are examples of variables.
It is called a variable because the value may vary
between data units in a population, and may change in
value over time.

Variable Types

Variables

Quantitative

Interval

Categorical

Ratio

Nominal

Dichotomous

Ordinal

Qualitative vs. Quantitative Data

(Statistical Analysis)
Data Types

Quantitative

Qualitative

Qualitative vs. Quantitative Data

Statistical Analysis
Where categorical
data is used,
statistical analysis
is limited

Where quantitative
data is used,
statistical analysis
is abundant

Cross Sectional vs. Time Series Data

Cross-Sectional
Data
Data are collected
at the same time
or approximately
same point in
time.

Time Series Data

Data are collected
over a series of
time

Example: Cross Sectional Data

Industry
Agriculture Hunting and
Forestry
Fishing
Mining and Quarrying
Manufacturing
Electricity Gas and
Water
Construction
Wholesale/Retail Trade;
Repair Services
Hotels and Restaurants
Transport Storage and
Communications
Financial
Intermediation
Real Estate Renting and
Business Activities
Education
Health and Social Work
Other Community
Social and Personal
Activities

Total - MSME +
Large
Establishments

No. of Establishment
Micro

Small

Medium

Total MSMEs

Large

4,024
1,199
422
112,940

2,616
886
261
101,208

1,161
255
126
9,892

115
28
16
887

3,892
1,169
403
111,987

132
30
19
953

1,417
2,536

502
1,305

690
982

118
122

1,310
2,409

107
127

385,902
97,362

366,280
87,730

18,872
9,403

458
165

385,610
97,298

292
64

9,439

6,975

2,174

153

9,302

137

26,524

21,449

4,837

107

26,393

131

48,359
14,205
31,685

42,352
7,619
30,044

4,918
6,095
1,405

384
280
124

47,654
13,994
31,573

705
211
112

44,373

41,545

2,719

49

44,313

60

Example: Time Series Data

Per Country Share To Total ASEAN GDP
ASEAN Country
Brunei
Cambodia
Indonesia
Laos
Malaysia
Myanmar
Philippines
Singapore
Thailand
Vietnam
Plus three
China
Japan
Korea
Total ASEAN GDP
Total ASEAN +3 GDP

2007
0.12
0.08
4.24
0.04
1.83
0.00
1.46
1.65
2.42
0.70

2008
0.12
0.09
4.32
0.05
1.89
0.00
1.47
1.51
2.31
0.77

2009
0.09
0.08
4.37
0.05
1.56
0.00
1.36
1.53
2.14
0.79

2010
0.00
0.08
4.98
0.05
1.68
0.00
1.41
1.47
2.24
0.75

34.25
42.92
10.29
12.54
100.00

38.28
41.31
7.89
12.52
100.00

40.46
40.80
6.76
11.97
100.00

41.75
38.45
7.15
12.65
100.00

Data Sources

Primary Sources of
Data
Collected first hand by the
researcher

Secondary Sources
of Data
Collated from existing
sources of data

Data Sources: Secondary

Philippine National
Statistics
Coordination
Board (NSCB)
Philippine Bureau
of Labor Statistics
(DOLE-BLS)

Philippine National
Statistics Office
(NSO)

Industry
Associations

International
Organizations

Related statistical
and empirical
studies

Statistical Studies
Statistical
Studies

Experimental

Variables of interests are identified ,

controlled and tested to see how
they influence another variable

Observational
(Nonexperimental)

No attempt is made to control

data

Error in Data Acquisition

Which is worse erroneous data or
no data at all?

Is Descriptive Statistics different

from Statistical Inference?

Divisions of Statistics
Statistics

Descriptive methods of
organizing, summarizing,
and presenting data in an
informative way

Inferential- methods used

to determine
inference/generalization
about a population on the
basis of a sample.

Descriptive Statistics
Data summary presented in ways that are
easily read/understood by the audience is
known as descriptive statistics
Manners of presenting:
Tabular
Graphical
Numerical

Examples

Element
Total Manufactures

2007
(Variable 1)
$42,803,999,580

2008
(Variable 2)
$40,976,461,529

2009
(Variable 3)
$32,974,938,296

2010
(Variable 4)
$44,662,514,142

2011
(Variable 5)
$39,175,193,042

- Electronic Products

$31,023,035,434

$28,500,910,005

$22,173,327,911

$31,079,478,195

$23,722,359,264

- Other Electronics
- Garments
- Textiles/Yarns and Fabrics
- Footwear

$1,150,732,340
$2,299,720,568
$203,868,461
$30,581,423

$1,426,219,849
$1,948,762,191
$194,143,939
$30,999,549

$1,417,174,284
$1,520,136,289
$146,544,895
$22,092,136

$1,472,812,123
$1,701,502,617
$169,388,664
$8,331,643

$1,447,550,199
$1,895,100,754
$183,624,065
$12,492,391

$103,799,539

$95,295,882

$65,801,612

$70,529,581

$40,144,663

$771,458,799
$241,162,291
$1,008,126,939

$918,384,082
$220,874,660
$1,123,246,115

$820,485,323
$138,344,746
$962,851,864

$1,028,745,335
$152,242,097
$1,533,891,505

$1,683,850,837
$165,185,703
$1,886,121,341

$217,386,413

$211,154,725

$156,398,335

$162,280,615

$176,895,137

$1,857,429,629

$2,099,944,158

$1,883,733,690

$2,571,917,128

$2,773,835,802

$735,025,376

$958,429,699

$850,607,087

$930,391,154

$1,033,284,613

$263,954,681

$261,530,754

$118,724,901

$154,486,219

$199,903,628

$152,192,456

$143,180,934

$127,957,629

$168,052,616

$186,633,938

$56,365,932

$41,991,187

$37,902,448

$43,239,409

$46,430,975

$341,976,736

$330,599,953

$290,820,435

$337,429,451

$423,353,695

$2,347,182,563

$2,470,793,847

$2,242,034,711

$3,077,795,790

$3,298,426,037

- Travel Goods and Handbags

- Wood Manufactures
- Furnitures and Fixtures
- Chemicals
- Non-Metallic Mineral
Manufactures
- Machinery and Transport
Equipment
- Processed Food and
Beverage
- Iron and Steel
- Baby Carr., Toys, Games and
Sporting Goods
- Basketwork, wickerwork, and
other articles of plaiting
materials
- Misc. Manufactured Articles,
n.e.s.
- Others

Observations

Descriptive Statistics Chart Type

Philippine Total Export Per Industry (Trend and Share), 2007-2011
Source: NSO
60.00

50.00

40.00

Special Transactions
Total Manufactures

30.00
42.80

Petroleum Products
44.66

40.98

39.18

Mineral Products
Forest Products

32.97

20.00

Total Agro-Based Products

10.00

0.00
2007

2008

2009

2010

2011

Example: Cross Sectional Data

Industry
Agriculture Hunting and
Forestry
Fishing
Mining and Quarrying
Manufacturing
Electricity Gas and
Water
Construction
Wholesale/Retail Trade;
Repair Services
Hotels and Restaurants
Transport Storage and
Communications
Financial
Intermediation
Real Estate Renting and
Business Activities
Education
Health and Social Work
Other Community
Social and Personal
Activities

Total - MSME +
Large
Establishments

No. of Establishment
Micro

Small

Medium

Total MSMEs

Large

4,024
1,199
422
112,940

2,616
886
261
101,208

1,161
255
126
9,892

115
28
16
887

3,892
1,169
403
111,987

132
30
19
953

1,417
2,536

502
1,305

690
982

118
122

1,310
2,409

107
127

385,902
97,362

366,280
87,730

18,872
9,403

458
165

385,610
97,298

292
64

9,439

6,975

2,174

153

9,302

137

26,524

21,449

4,837

107

26,393

131

48,359
14,205
31,685

42,352
7,619
30,044

4,918
6,095
1,405

384
280
124

47,654
13,994
31,573

705
211
112

44,373

41,545

2,719

49

44,313

60

Descriptive Statistics Chart Type

Percentage of Establishments by Industry, 2009
(Source: DTI BMSMED)
1%

2%

0%
0%

Agriculture Hunting and Forestry

6%
4%

15%

Fishing
0%

6%

0%

Mining and Quarrying

Manufacturing

3%
1%

Electricity Gas and Water

Construction
13%
Wholesale/Retail Trade; Repair Services
Hotels and Restaurants

49%

Transport Storage and Communications

Financial Intermediation

Statistical Inference
Population larger group of elements
in a particular study (i.e. general, that
which you intend to make an
inference about)
SAMPLE

Sample the smaller group you take

out of the population to closely study
the population. It is a subset of the
population

Sampling Vs. Census

Random
Census Type

Probabilistic
Sampling
Stratified

Data Acquisition
Sampling
Quota

Non-Probabilistic
Sampling

Purposive

Convenience

Census and Survey

Statistical Inference process where data from
sample/population is used to make estimates
and test hypotheses about the characteristics of
the population.
Sample Survey
process of conducting
survey to collect data
for a sample.

Census process of
conducting survey to
collect data for the
entire population

End.