# EC255 Chapter Notes -Squared Deviations From The Mean, Standard Deviation, Kurtosis

48 views6 pages
School
WLU
Department
Economics
Course
EC255
Professor EC255 Week 1
1.1 STATISTICS IN BUSINES
Virtually every area of business uses statistics in decision making,
Several examples are as follows:
-Marketing
-Management
-Finance
-Operations and Supply Chain Management
-Economics
-Accounting
-Management Information Systems
1.2 BASIC STATISTICAL CONCEPTS
Statistics a science dealing with the collection, analysis, interpretation, and presentation of numerical
data
Population a collection of persons, objects, or items of interest
Census gathering data from the whole population for a given measurement o interest
Sample a portion of the whole
-The study of statistics can be organized in a variety of was
-Statistics can be subdivided into two branches: descriptive statistics and inferential statistics
Descriptive Statistics Using data gathered on a group to describe or reach conclusions about that same
group
-Descriptive statistics can be used for batting averages, save percentages, and first downs because they
describe an individual or team effort
Inferential Statistics Gathering data from a sample and using the statistics generated to reach
conclusions about the population from which the sample was taken
-The data gathered from the sample are used to infer something about the larger group
-Inferential statistics are sometimes referred to as inductive statistics
-One application of inferential statistics is in pharmaceutical research. Some new drugs are expensive to
produce, and therefore tests must be limited to small samples of patients
-Market researchers use inferential stats to study the impact of advertising on various market segments
-The advantage to using inferential statistics is that they enable the researcher to effectively study a
wide range of phenomena without having to conduct a census
Parameter a descriptive measure of the population
Statistic a descriptive measure of a sample
-Differentiation between the terms parameter and statistic is important only in the use of inferential
statistics. A business researcher often wants to estimate the value of a parameter or conduct tests
about the parameter. However, the calculation of parameters is usually either impossible or infeasible
because of the amount of time and money required to take a censure. In such cases, the business
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 6 pages and 3 million more documents. EC255 Week 1
researcher can take a random sample of the population, calculate a statistic on the sample, and infer by
estimation the value of the parameter.
1.3 DATA MEASUREMENT
Nominal Level
-Numbers representing nominal-level data can be used only to classify or categorize
-Ex. Employee ID numbers, sex, religion, ethnicity, geographic location place of birth, SIN, telephone
numbers
-Statistical techniques that are appropriate for analyzing nominal data are limited
Ordinal Level
-Can be used to rank or order data
-With ordinal data, the distances between consecutive numbers are not always equal
Interval Level
-The distances between consecutive numbers have meaning and the data are always numerical
-Ex. Temperature
-The existence of 0 actually means something with interval level data
Ratio Level
-Have an absolute zero and the ratio of two numbers is meaningful
-The zero value in the data represents the absence of the characteristic being studied
-The value of zero cannot be arbitrarily assigned because it represents a fixed point
-Ex. Height, mass, time, volume, production cycle time, work measurement time, passenger distance,
etc.
-Statistical techniques can be separated into two categories: parametric statistics and nonparametric
statistics
Parametric statistics require that data be interval or ratio
Nonparametric statistics nominal or ordinal data
2.1 FREQUENCY DISTRIBUTIONS
Frequency distribution a summary of data presented in the form of class intervals and frequencies
-Frequency distributions are relatively easy to construct they vary in shape and design
Range the difference between the largest and smallest number
-Select between 5 and 15 classes when making a frequency distribution chart
-The frequency distribution must start at a value equal to or lower than the lowest number of the
ungrouped data and end at a value equal to or lower than the lowest number and vice versa
-Class endpoints are selected so that no value of the data can fit into more than one class
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 6 pages and 3 million more documents.

## Document Summary

Virtually every area of business uses statistics in decision making, Statistics a science dealing with the collection, analysis, interpretation, and presentation of numerical data. Population a collection of persons, objects, or items of interest. Census gathering data from the whole population for a given measurement o interest. The study of statistics can be organized in a variety of was. Statistics can be subdivided into two branches: descriptive statistics and inferential statistics. Descriptive statistics using data gathered on a group to describe or reach conclusions about that same group. Descriptive statistics can be used for batting averages, save percentages, and first downs because they describe an individual or team effort. Inferential statistics gathering data from a sample and using the statistics generated to reach conclusions about the population from which the sample was taken. The data gathered from the sample are used to infer something about the larger group. Inferential statistics are sometimes referred to as inductive statistics.