WHY A MANAGER NEEDS TO KNOW

ABOUT STATISTICS
To know how to properly present and
describe information.
To know how to draw conclusions about
large populations based only on
information obtained from samples
To know how to improve processes
To know how to obtain reliable forecasts.
Statistics - the science of collecting,
organizing, analyzing, and interpreting
data.

Statistical Methods
Descriptive Statistics

Inferential Statistics
Collecting and describing
data.
Making decisions based on sample
data.
Descriptive Statistics
Collect Data e.g. Survey
Present Data e.g. Tables and Graphs
Characterize Data e.g. Mean

n
x
i

A Characteristic of a:
Population is a Parameter
Sample is a Statistic.
Inferential Statistics
Estimation
Hypothesis
Testing
Making decisions concerning a
population based on sample
results.
Types of Data
Categorical
Discrete Continuous
Numerical
Data
Types of Data

Qualitative Data - non-numerical characteristics or
labels

Examples: Eye Color, First Name
Favorite Movie, Political Party

Quantitative Data - numerical measurements or
quantities

Examples: Height, Weight, Income
Resting Pulse Rate, Blood Alcohol
Level

Types of Data Sets

Population - data set consisting of all
outcomes, measurements, or responses
of interest

Sample - data set which is a subset of
the population data set





Examples

If we are interested in measuring the salaries of American high-
school teachers, the population data set would be a list of the
salaries of every high-school teacher in America. A sample data
set could be obtained by selecting 100 high-school teachers
from a across the country and listing their salaries.

A polling organization wants to know whether Americans favor
increased defense spending. The population data set would
consist of the responses of every American. A common way of
choosing a sample data set would be to randomly call 1000
Americans and gather their responses to the question of
whether they favor increased defense spending.

A biologist wants to measure the weights of female Alaskan
grizzly bears. What would be the population data set? A
possible sample set?

Types of Measurements

Parameter - a numerical measurement
made using the population data set

Statistic - a numerical measurement
made using a sample data set


Examples
Using the teacher salary data sets, we could calculate the average salary
for the high-school teachers. The average calculated from the population
data set would be the parameter. The average calculated from the sample
of 100 teachers would be a statistic.

Using the opinion poll data on defense spending, we could calculate the
percentage of Americans who favor increased defense spending. The
actual percentage of all Americans who favored increased defense
spending would be the parameter. The percentage of the 1000 Americans
in our sample who favored increased spending would be a statistic.

Notice that unless the population is very small it is probably impossible to
gather the population data set, and so it is usually impossible to calculate the
parameter we are interested in.

The main idea of the science of statistics is that we can get around this difficulty
by selecting a sample, calculating the sample statistic, and use the sample
statistic to make an estimate of the parameter.

Unfortunately, statistical estimates can never be 100% certain. (But they can be
90% or 95% or 99% certain)

Levels of Measurement
Nominal Data Can be qualitative only. Data values
serve as labels, but the labels have no meaningful order.

Examples: Blood Type, College Major, Breed of
Dog, Shape of Bacteria in a Petri Dish

Ordinal Data Can be qualitative or quantitative. Data
values serve as labels but the labels have a natural
meaningful order. Differences between values, however,
are meaningless.

Examples: Statistics Grade, NCAA Basketball
Rankings, Terror Threat Level

Interval Data Are always quantitative. Data values are
numerical, so they have a natural meaningful order, and
differences between data values are meaningful. The ratio of
two data values, however, is meaningless. This occurs when
zero is an arbitrary measurement rather than actually indicating
nothing.

Example: Temperature, Year of Birth

Ratio Data Are always quantitative. Data values are
numerical, have order, and both differences and ratios between
values are meaningful. Zero measurement indicates absence of
the quantity being measured.

Example: Weight, Height, Volume, Number of Children

Data Sources
Primary
Data Collection
Secondary
Data Compilation
Observation
Experimentation
Survey
Print or Electronic
Methods of Data Collection
Census - collect measurements from the entire population
- Used when population is small.
Examples:
Determine average grade on a Statistics exam
Measure salaries of all 50 state governors

Sampling - choose a sample from your population and
collect measurements from sample.
- Used when population is large. (Most Common)
Examples:
Opinion Polls
Determine average income in Philippines




Experiment - Collect a sample, split the sample into two
groups:
o The Case Group receives treatment.
o The Control Group does not.
- Used to measure the effect of treatment by
comparing the characteristics of the case and control groups.

Example:
A sample of 200 cancer patients is selected. An
experimental drug is given to 100 patients and the remaining
100 patients receive a placebo. The survival rates of the two
groups are then compared



BASIC TYPES OF SAMPLING
Non-probability Sampling

- is arbitrary (non-random) and is generally subjective. Data
gatherers choose sample cases, as they wish or wherever they
find them.
Probability Sampling

- based on the concept of random selection, a procedure that
assures that all elements in the population are given an equal
chance of being selected as a sample unit.
Quota
Types of Sampling Methods
Samples
Non-Probability
Samples
Judgement Chunk
Probability Samples
Simple
Random
Systematic
Stratified
Cluster
WHY STUDY A SAMPLE?
It is cheaper.
It is faster.
It is more accurate.
It can yield more comprehensive
information.
Non-probability sampling is judgmental sampling.

It does not provide every member of the population an
equal chance of being selected as part of the sample.
The chance of an element to be chosen as a sample is
unknown.
There is possibility of bias. A bias is the greater
probability of certain type/class of sample
units/elements to be included in the selected sample.
The conclusion derived from a non-probability sample
is limited to the sample itself.
NON-PROBABILITY SAMPLING
In accidental sampling, the investigator selects the sample units as they
become available.

In this type of sampling, the investigator uses a specific purpose in selecting
a sample.


For example, an investigator who wants to interview 25 students
about their study habits may stand at the door of a classroom
and interview the first 25 students who enter the room. If better
students tend to enter the classroom earlier than the slower
students, the bias in favor of the brighter students is introduced.
For instance, a researcher wants to know how grandparents feel
about their grandchildren. He may select men and women who
are 65 years old and above who have grandchildren to serve as
respondents. If there are younger grandfathers in the population,
they cannot be included in the study.
ACCIDENTAL SAMPLING
PURPOSIVE SAMPLING
There are several ways of drawing probability
samples. The five most common techniques used are simple
random sampling, systematic sampling with a random start,
stratified sampling, cluster sampling, multistage sampling.
PROBABILITY SAMPLING TECHNIQUES
simple random sampling
systematic sampling with a random start
stratified sampling
cluster sampling
multistage sampling
Simple Random Samples
Every individual or item from the
target frame has an equal chance of
being selected.
Selection may be with replacement or
without replacement.
One may use table of random numbers
for obtaining samples.
For instance, you want to study the extent of participation in local governance among 24
barangay captains in a municipality in Tagbilaran, Bohol and you want to draw a random sample of
10 officials. A decision has been made to choose the sample without replacement. It is also assumed
that the target population is homogeneous in regard to a number of characteristics. Sampling may be
done by draw lots or by using a table of random number.

Population: 24 barangay captains
Sampling Frame: A list of the 24 barangay captains
Sampling unit: Barangay Captain

Steps in selecting the sample by drawing of lots (without replacement)
Step one: Make a list of the barangay captains and give them a corresponding number from 01 to 25.
Assuming that the names of barangay captains are the alphabets, list the names of barangay
captains and give them their corresponding numbers.

A
B
C
D
E
F
1
2
3
4
5
6
G
H
I
J
K
L
7
8
9
10
11
12
M
N
O
P
Q
R
13
14
15
16
17
18
S
T
U
V
W
X
19
20
21
22
23
24
Step Two: Write a number on a small piece of paper and roll it.. After writing all 25 numbers, place
the rolled pieces of paper in a container, shake the container and pick one piece of paper at a time
until you have picked 10.

For instance if the numbers picked are 3, 7, 13, 25, 17, 21, 5, 6, 12, 20, then the sample
barangay captains are C, G, M, Y, Q, U, E, F, R, and T.
Systematic Samples
Decide on sample size: n
Divide population of N individuals into groups of
k individuals: k = N/n
Randomly select one individual from the 1st group.
Select every k-th individual thereafter.

N = 64
n = 8
k = 8
First Group
For a study on the Knowledge and Practices of Farmers Regarding the Use of Pesticides in the
Province of Iloilo, suppose you wish to draw a sample of 15 farmers from 30 eligible respondents.
These thirty were identified from a list of farming cooperative members.

Population: farmers
Sampling Frame: A list of names of farmers
Sampling Unit: a farmer
A
B
C
D
E
F
G
H
1
2
3
4
5
6
7
8
I
J
K
L
M
N
O
P
9
10 -RS
11
12
13
14
15
16
Q
R
S
T
U
V
W
X
17
18
19
20
21
22
23
24
Y
Z
AA
BB
CC
DD
25
26
27
28
29
30
Step 1: List the 30 eligible farmers, in alphabetical order, and number them from 1 to 30.
Step 2. Determine the sampling interval (K) by dividing the size of the population by the number
of units desired: K = 30/15 =2.
Step 3. Select a random start by picking at random any number from 01 to 30. For example
you picked 10, then start at number 10.
Step 4: From number 10, the random start (RS), take every second name in the list. When
you reach number 30, go back to number one and continue drawing your sample
units, until you have drawn 15 numbers.
STEPS IN DRAWING THE SAMPLE FARMERS
Stratified Samples
Population divided into 2 or more groups according
to some common characteristic.
Simple random sample selected from each.
The two or more samples are combined into one.
In a study on Attitudes of farmers Towards Land Reform, the study population consists of 75 farmers: 30 rice
farmers, 20 sugar cane farmers 10 vegetable growers, and 15 cutflower growers. If the attitudes towards land reform of
the four groups are expected to differ, a sample from each group must be drawn.

Population: All the 75 farmers
Sampling Frame: List of farmers by type
Sampling unit: Farmer
Types of Farmer Population Sampling Fraction Sample Size
Rice-farmers 30 30/75x 30 12
Sugar farmers 20 20/75x 30 8
Vegetable growers 10 10/75x 30 4
Cutflower producers 15 15/75x 30 6
Total 75 30
Step 4: With the sub-sample size determined, select the sample from each stratum, using either simple
random sampling or systematic sampling with a random start.
Step 1: Classify the 75 farmers: rice-farmers, sugar cane farmers, vegetable growers, cutflower
producers
Step 2: Determine the overall sample size using an appropriate formula. For example, 30 is the
desired sample size.
Step 3: Allocate the needed sample size (n) among the four strata either equally, if the
subpopulations are more or less equal; or proportionately, if the numbers in the various
strata vary. To do this divide the stratum size by the population size (N) and multiply
the quotient by the needed sample size.
STEPS IN DRAWING THE SAMPLE
Cluster Samples
Population divided into several clusters,
each representative of the population.
A random sampling of clusters is taken
All individuals or items in each selected clusters are
studied.
Sample
Clusters
A B C D E F
H I J K
Consider the study Attitudes Towards Dishonesty and Dishonest Practices Among Employees in
Municipal LGUs in Province. The employees may be divided into 10 heterogeneous groups, or
classes/clusters, each with 10 individuals, or a total of 100 employees. If the desired sample size is 50
employees, 5 sample clusters need to be drawn at random.

Step 1: Number the 10 groups consecutively from 01 to 10.
Step 2: Using simple random sampling, draw five numbers. Suppose numbers 2, 6,5,.9, and
1 are chosen
Step 3: Identify the groups represented by the numbers drawn.
Step 4: Study all the employees in the five sample clusters.
Population: All the 10 classes/clusters
Frame: List of 10 clusters/groups
Sampling Unit: One group/cluster with 10 members
A B C D E F
H I J K
STEPS IN SELECTING THE SAMPLE CLUSTERS:
A B C D E F
H I J K
A B C D E F
H I J K
A B C D E F
H I J K
A B C D E F
H I J K
A B C D E F
H I J K
A B C D E F
H I J K
A B C D E F
H I J K
A B C D E F
H I J K
1 2 3 4 5
6 7 8 9 10
DETERMINATION OF SAMPLE SIZE
CONSIDERATIONS IN DETERMINING THE SAMPLE SIZE
1. Type of survey variables or data items to be
estimated
2. Availability of resources
3. Degree of accuracy or tolerable error of the
estimate
4. Availability of Sampling Frame
5. Estimated Population Size
Z
2
pq
n = --------------
d
2

Where:

n = the desired sample size
Z = the standard normal deviate, usually set at 1.96, which
corresponds to the 95 percent level of confidence
p = the proportion in the target population estimated to
have a particular characteristic. If there is no
reasonable estimate, then use 50 percent (.50)
q = 1.0 p
d = margin of error, usually set at either .05,
0.02 or .01

Sample Size Determination for Categorical Survey Variable
with a very large but unknown population size
For example, if you want to determine the sample size of a
study in which the population is over 10,000, and if the proportion of
a target population with a certain characteristic is .50, and if the
level of confidence you want to use is 95 percent or the Z statistic
1.96; and you desire an accuracy level of .05, then the sample
size is computed as:

(1.96)
2
(1-.50) (.50)
n = -------------------------------------
(.05)
2


n = 384
NZ
2
(p(1-p))
n = ---------------------------
Nd
2
+ Z
2
(p (1-p))
Sample Size Determination for Categorical Survey Variable
with known population size
N
n = ----------
Nd
2
+ 1
where :
N = Population
n = the desired sample size
d = margin of error, usually set at either .05, .025, or .01
If Z is set at 95% confidence level and p= 0.5, the formula
can be simplified into the following form