STATISTICS

Week 1
Introduction : Data and Statistics
 Topics

1. Introduction : Data and Statistics

2. Descriptive Statistics
3. Introduction to Probability
4. Discrete Probability Distributions
5. Continuous Probability Distributions
6. Sampling and Sampling Distributions
7. Interval Estimation
8. Hypothesis Tests
9. Analysis of Variance
10. Simple Linear Regression
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 References

• Anderson, David R., Sweeney, Dennis J., Williams, Thomas A.

(2011). Statistics for Business and Economics. 11. Cengage
Learning. USA. ISBN: 978-0538481649.

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Evaluating and Grading

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 Learning Outcomes

• LO 1: Explain the data and statistics

• LO 2: Calculate the statistical measurements
• LO 3: Interpret the results of statistical measurements
• LO 4: Apply statistical method to the real problem
• LO 5: Analyze the suitable decision from statistical method
solution

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(1) Explain the data and statistics

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1. Data

2. Statistics

3. Applications in Business and Economics

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• Data are the facts and figures collected, analyzed, and summarized
for presentation and interpretation
• All the data collected in a particular study are referred to as the data
set for the study

Example 1 : Table 1 shows a data set containing information for 25

companies that are part of S&P 500. The S&P 500 is made up of 500
companies selected by Standard&Poor’s. These companies account for
76% of the market capitalization of all U.S.stocks. S&P 500 stocks are
closely followed by investors and Wall Street analysts.

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Table 1. Data Set for 25 S&P 500 Companies

Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.
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(1) Elements, Variables, and Observation
• Elements
Are the entities on which data are collected  For the data set in table 1, each
individual company’s stock is an element; the element names appear in the first
column. With 25 stocks, the data set contains 25 elements
• Variables
Variable is a characteristic of interest for the elements  The data set in table 1
includes the following five variables
1. Exchange
2. Ticker symbol
3. Business week rank
4. Share price ($)
5. Earnings per share ($)

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• Observations
Measurements collected on each variable for every element in a
study provide the data. The set of measurement obtained for a
particular element is called an observation
 Refering to table 1, we see that the set of measurements for
the first observation (Abbott Laboratories) is N, ABT, 90, 46, and
2.02. The set of measurements for the second observation (Altria
Group) is N, MO, 148, 66, and 4.57, and so on. A data set with 25
elements contains 25 observations.

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(2) Scales of Measurement

Scale Group Order Distance Absolute Zero

Nominal √ - - -

Ordinal √ √ - -

Interval √ √ √ -

Ratio √ √ √ √

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 Example 2:
Nominal :
Personal Computer Ownership Yes No

Ordinal :
Product satisfaction Very Unsatisfied Fairly Unsatisfied
Fairly Satisfied Very Satisfied

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 Example 2 :
Interval :
Temperature 0 0c

Ratio :
Weight 45 kg, 30 kg, etc
Salary Rp. 2.000.000, Rp. 3.000.000, etc

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(3) Qualitative and Quantitative Data

• Qualitative data include labels or names used to identify an attribute of each

element.
 Qualitative data use either the nominal or ordinal scale of measurement
and may be nonnumeric or numeric
• Quantitative data require numeric values that indicate how much or how
many
 Quantitative data are obtained using either the interval or ratio scale of
measurement
• A qualitative variable is a variable with qualitative data
• A quantitative variable is a variable with quantitative data

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Example 3:

• Qualitative data : Brand and model

• Quantitative data : Price ($)

Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.
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(4) Cross-Sectional and Time Series Data

• Cross-sectional data are data collected at the same or approximately the

same point in time
The data in table 1 are cross-sectional because they describe the five
variables for the 25 S&P 500 companies at the same point in time
• Time series data are data collected over several time periods
 Figure 1 provides a graph of the U.S. City average price per gallon for
unleaded regular gasoline. The graph shows gasoline price in a fairly stable
band between $1.80 and $2.00 from May 2004 through February 2005. After
that gasoline price became more volatile. It rose significantly, culminating
with a shard spike in September 2005

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Figure 1. U.S City Average Price per Gallon for Conventional Regular Gasoline
Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.

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(5) Data Sources

1. Existing Sources

2. Statistical Studies

3. Data Acquisition Errors

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 • Descriptive Statistics
Such summaries of data, which may be tabular, graphical, or
numerical, are referred to as descriptive statistics

Example 4: Frequencies and Percent Frequencies for the

Exchange Variable
Table 2. Frequencies and Percent Frequencies for the Echange Variable

Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649. 22
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Example 5 : Bar Graph for the Exchange Variable

Figure 2. Bar Graph for the Exchange Variable

Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.

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Example 6 : Histogram of Share Price for 25 S&P Stocks

Figure 3. Histogram of Share Price for 25 S&P Stocks

Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.

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• Statistical Inference
Population
• The set of all elements of
interest in a particular study
Sample
• A subset of the population
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Census
• The process of conducting a survey to
collect data for the entire population
Sample Survey
• The process of conducting a survey to
collect data for a sample
25
As one of its major contributions, statistics uses data from a
sample to make estimates and test hypotheses about the
characteristics of a population through a process referred to as
Statistical Inference

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Figure 4. The Process of Statistical Inference for the Norris Electronics Example
Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.

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(1) Accounting (2) Finance (3) Marketing

(4) Production (5) Economics

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• Accounting : Public accounting firms use statistical
sampling procedures when conducting audits for their
clients
• Finance : Financial analysis use a variety of statistical
information to guide their investment
recommendations
• Marketing : Electronic scanners at retail checkout
counters collect data for a variety of marketing
research applications

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• Production : A variety of statistical quality control
charts are used to monitor the output of a production
process
• Economics : Economics use a variety of statistical
information in making such forecasts

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 Exercises
1. Table shows a sample of nine European hotels (Conde Nast Traveler,
January 2000)
a.What is the average number of rooms for the nine hotels?
b.Compute the average overall score
c.What is the percentage of hotels located in England?
d.What is the percentage of hotels with a room rate of $$?

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 Exercises

Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.

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 Exercises
2. All-in-one sound systems, called minisystems, typically include an
AM/FM tuner, a dual-cassette tape deck, and a CD changer in a book-
sized box with two separate speakers. The data in table show the retail
price, sound quality, CD capacity, FM tuning sensitivity and selectivity,
and the number of tape decks for a sample of 10 minisystems
(Consumer Reports Buying Guide 2002).
a. How many elements does this data set contain?
b. What is the population?
c. Compute the average price for the sample
d. Using the results in part (c), estimate the average price for the
population.

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 Exercises

Source : Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011). Statistics for
Business and Economics. 11. Cengage Learning. USA. ISBN: 978-0538481649.

Bina Nusantara University 36

• Anderson, David R., Sweeney, Dennis J., Williams, Thomas A. (2011).
Statistics for Business and Economics. 11. Cengage Learning. USA.
ISBN: 978-0538481649.

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Thank You