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Statistics
Chapter - 1
We are into that
journey…
And, we start
with
What is Statistics?
“statistics is a discipline that is dedicated to drawing actionable
insights from available data”
Statistics
Definition
• Science of gathering, presenting, analyzing, and
interpreting data
Subset
Statistic
Parameter
1.10
Inferential Statistics
Descriptive Statistics describe the data set that’s
being analyzed, but doesn’t allow us to draw any
conclusions or make any interferences about the
data. Hence we need another branch of statistics:
inferential statistics.
1.11
Statistical Inference
Statistical inference is the process of making an
estimate, prediction, or decision about a population
based on a sample.
Population
Sample
Inference
Statistic
Parameter
The values of the variable are the range of possible values for a
variable.
E.g. student marks (0..100)
age of a worker (18.. 65)
E.g. student marks: {67, 74, 71, 83, 93, 55, 48}
age of a worker: {25, 53, 35, 42, 27}
Types of Data
Data Type Information Type Measurement Type
1. Marketing
2. HR
3. Information Technology
4. Operations
5. Finance and Accounting
6. Any other (please specify)
OTHER EXAMPLES
• Gender
• Religion
• Geographic location The numbers assigned in a
• Place of Birth nominal scale cannot be
added, subtracted, multiplied
• Telephone number or divided.
• Employee ID number
ORDINAL LEVEL
• The next higher level of data is the ordinal level
• Rating of a finance Professor
RATING FREQUENCY
5 SUPERIOR 6
4 GOOD 28
3 AVERAGE 25
2 POOR 12
1 INFERIOR 3
One can compute arithmetic mean, standard deviation, correlation coefficient and
conduct a t-test, Z-test, regression analysis and many more….
RATIO LEVEL DATA
• The ratio level is the “highest” level of measurement.
It has all the characteristics of the interval level, but
in addition, the 0 point is meaningful and the ratio
between two numbers is meaningful.
• Examples: Wages, weight, changes in stock prices,
distance between branch offices, and height.
• Father – Son Income Combination
Qualitative Quantitative
Indiastat.com
Economic Outlook Database :CMIE
PROWESS Database
CRISIL Database
Applications in
Business and Economics
Accounting
Public accounting firms use
statistical sampling procedures
when conducting audits for their
clients.
Economics
Economists use statistical
information in making forecasts
about the future of the economy or
some aspect of it.
Applications in
Business and Economics
Marketing
Electronic point-of-sale scanners at
retail checkout counters are used to
collect data for a variety of
marketing research applications.
Production
A variety of statistical quality control
charts are used to monitor the
output of a production process.
• Finance
Financial advisors use price-earnings ratios and
dividend yields to guide their investment
recommendations.