MODULE 1

AE 9
(Statistical Analysis with Software Application)

Bachelor of Science in Accountancy

Bachelor of Science in Accounting Information System
Bachelor of Science in Management Accounting

ACADEMIC YEAR 2021-2022

First Semester

MR. ARVIN C. OCTOMAN, LPT

Instructor
 MODULE 1 FOR AE 9 (LECTURE)

Credits : 3 units lecture (3 hours/week)

Pre-Requisite : none
Course Title : Statistical Analysis with Software Application

REFERENCES:

Book:

 Narag, Edlyn R. (2010). Basic Statistics with Calculator and COmputer Application.
REX Book Store, Inc. 856 Nicanor Reyes, Sr. St., Sampaloc, Manila. ISBN: 978-971-23-
5602-5
 Asaad, Abubakar S. (2008). Statistics Made Simple for Researchers. REX Book Store,
Inc. 856 Nicanor Reyes, Sr. St., Sampaloc, Manila. ISBN: 978-971-23-4994-2

Online References:

 Definition of Statistics - [Link]

 Functions or Uses of Statistics - [Link]
statistics/[Link]
 The Difference Between Descriptive and Inferential Statistics -
[Link]
 Population vs Sample: What’s the difference? -
[Link]
 Data Module #1: What is Research Data? -
[Link]
 Introduction to Types of Variables in Statistics - [Link]
variables-in-statistics/

Lesson Objectives:

At the end of this module, you should be able to:

1. Define statistics;
2. Discuss briefly the historical development of statistics
3. State the uses of statistics
4. Differentiate inferential from descriptive statistics; a sample from population;
5. Distinguish a parameter from statistics;
6. Differentiate qualitative from quantitative data;
7. Contrast a discrete from a continuous data;
8. Give examples of nominal, ordinal, interval, and ratio data.
I. INTRODUCTION

Statistics

The term statistics, carries two different meanings. In plural sense, statistics refers to a set
of data or a mass of observations. As such, statistics is synonymous with “data” or “figures”.
However, in singular sense, statistics refers to the science that deals with the body of principles
and procedures for the collection, organization, analysis, and interpretation of quantitative data
and such problems as experiment design and decision-making.

Statistics involves the following processes:

1. Collection of data. This is the process of gathering information through direct or interview,
indirect or questionnaire, observation, registration, and experiment method.
2. Tabulation or presentation of data. This is a process of organizing data into texts, tables,
charts, or graphs.
3. Analysis of data. This involves the process of extracting relevant information from the
organized collected data. Statistical techniques are needed in this process.
4. Interpretation of data. This is the process of drawing conclusions from the analyzed data.
It involves the formulation of conclusion about a large group based on the gathered data
from a small group.

FIGURE 1.1. Steps in Statistical Inquiry

II. BRIEF HISTORICAL DEVELOPMENT OF STATISTICS

Statistics as a discipline started with the beginning of man’s existence. In ancient times, it
was used to provide information pertaining to taxes, soldiers, agricultural crops and even to
athletic endeavors. Later, it developed into an inferential science sometime in the 16th century.
As an inferential science, it largely dependent on the theory of probability. Then it continued to
develop as a result of the diligent research made by people in various fields during the past 400
years.

Statistics also develop as a science partly due to man’s propensity for gambling. This
inclination then led to the early development of the probability theory. During this time, the
gamblers asked assistance from mathematicians to provide them optimum techniques for various
games of chance for the purpose of having more wins. These requests were considered by some
mathematicians like Pascal, Leibneitz, Fermat, and James Bernoulli.

After this event, De Moivre (1733) discovered the equation for the normal distribution upon
which many of the theories of inferential statistics have been based. This bell-shaped distribution
was referred to as the Gaussian distribution for a study of errors of repeated measurements of the
same quantity. It was during this time that the work of Laplace gained popularity for it was about
the application of statistics to astronomy.

Another statistician was Adolph Quetelet (1796-1874), a Belgian by origin. He made

applications of statistics in the field of psychology and education. For this feat he was considered
the first statistician to demonstrate that statistical techniques derived from one area of research
could be applied to other areas.

Perhaps you will appreciate Sir Francis Galton (1822-1911) for being the greatest
contributor of statistics to the social sciences. His most notable contribution was the application
of statistics to heredity and eugenics and his discoveries of percentiles. Along with Galton was
Karl Pearson (1857-1936) who worked with him to develop the theory of regression and
correlation. Pearson was responsible for evolving the present theories of sampling.

Finally, it is worthwhile to know that the beginning of the 20th century, William S. Gosset
developed methods for decision-making derived from smaller sets of data. While he was working
in an Irish brewery, he made a study and then published its results under the name “student”. He
did this to disguise his real name because the brewery company prohibited research since the
results might prove useful to its competitors. This idea was continued by Sir Ronald Fisher
(1890-1962) who developed statistics for experimental designs.

III. USES OF STATISTICS

“Statistics is the most important science in the whole world: For upon it depends the
practical application of every other science and of every art: The one science essential to all
political and social administration, all education, and all organization based on experience, for
it only gives result of our experience.”
-- Florence Nightingale --

1. It aids in decision-making
 Provides comparison
 Explains action that have taken place
 Justifies a claim or assertion
 Predicts figure outcome
 Estimates unknown outcome
2. It summarizes data for public use
3. It can give a precise description of data
 This enables us to make accurate statement or judgments about averages, variability, and
relationship.
4. It can predict the behavior of an individual
 Through the result of psychological test, this becomes an indicator of the behavior of an
individual.
5. It can be used to test hypothesis
 We can determine whether a variable is related or not to another variable through a test of
inference such as correlation, t-test, chi-square test, ANOVA, and others. This includes
the scale of measurement and its distribution whether normally distributed or not.
6. It is an essential tool in education, government, office of justice programs, business and
economics, medicine, experimental psychology, sociology, sports, actuarial work,
criminology figure, heredity, insurance, poverty, public opinion polling, and census.
IV. TWO DIVISIONS OF STATISTICS

1. Descriptive Statistics
It is concerned with summarizing and describing important features of numerical data
without attempting to infer. This method can either be graphical or computational. Topics
included in this study are measures of central tendency, variability of scores, skewness and
kurtosis.
Descriptive statistics’ collection and organization of data where the statistician tries to
describe a situation; masses of unorganized numerical data are of little value unless statistical
techniques are available to organize this type of data into a meaningful form

2. Inferential Statistics
This demands a higher order of critical judgment and mathematical methods. It aims to give
information about large group of data without dealing with each and every element of these
groups. Testing of hypothesis, using t-test, z-test, simple linear correlation, analysis of variance,
the chi-square test, regression analysis and time series analysis are included in this study.
Inferential Statistics consists of generalizing from samples to populations, performing
hypothesis testing, determining relationships among the variables and making predictions. Its
main concern is to analyze the organized data leading to prediction or inferences. Statisticians
make predictions or inferences based on the conditions of past and present data.

Descriptive vs. Inferential Statistics

Although descriptive statistics is helpful in learning things such as the spread and center of
the data, nothing in descriptive statistics can be used to make any generalizations. In descriptive
statistics, measurements such as the mean and standard deviation are stated as exact numbers.

Even though inferential statistics uses some similar calculations — such as the mean and
standard deviation — the focus is different for inferential statistics. Inferential statistics start with
a sample and then generalizes to a population. This information about a population is not stated
as a number. Instead, scientists express these parameters as a range of potential numbers, along
with a degree of confidence.

V. POPULATION AND SAMPLE

Population

 It is the complete set of individuals, objects, places, events, and

reactions having some characteristics in common.
 In statistical investigation it is defined by naming its unique
properties.
 It consists of numerical values associated with objects or
individuals.

Sample

 It is a representative cross-section of elements draw from a

population.
 It is a subgroup of the population; taken from the population so
as to represent the population characteristics or traits.

[Link]
VI. PARAMETER AND STATISTICS

Parameter is defined as a numerical characteristics of the population.

Statistic is defined as numerical characteristics of the sample

Example: Identify the parameter and the statistic in the given situation below:

In order to estimate the true proportion of employees of E & A Marketing who smoke cigarettes,
the research department polled a sample of 300 employees and determined that the proportion of
employees from the sample who smoke cigarettes is 15%.

Parameter: All employees of E & A Marketing who smoke cigarettes

Statistic: 300 employees of E & A Marketing

VII. DATA

Data are the raw materials with which the statistician works.

Classification of Data

1. Qualitative Data are categorical data taking the form of attributes or categories. They have
labels or names assigned to their respective categories.

Examples:

Judicial Cases Handled - criminal, civil, appealed

Sex - male, female
Type of Lawyer - prosecutor, private practice, PAO
Year Level - 1st Year, 2nd Year, 3rd Year, 4th Year, …
Religion - Roman Catholic, Iglesia Ni Cristo, Born Again, 7th Day Adventist
Employment Status - Regular, Probationary, Part-time
Course/Program - BSA, BSED, BSCrim., BSBA, BSPsy., BSIT, [Link]., BSN

2. Quantitative Data are data that consist of numbers obtained from counts or measurements
like weights, heights, ages, temperatures, scores, IQ, prices of commodities, tuition fees of
students, and other measurable quantities.

Examples:

Weight - 100 lbs., 215 kg., 770 mg.

Height - 24 in., 345cm., 53ft.
Ages - 5 years old, 21 years old, 40 years old
Temperature - 100°C, 32°F, 65°K
Scores - 45, 67, 87, 93, 64, out of 100 items
IQ - 75, 90, 110
Raw vs. Array

Raw Data are data in its original form.

Array Data are data arranged either from highest to lowest or from lowest to highest

Examples:
After checking the papers of 15 BSA students in Statistics in their final examination, the
professor recorded their scores:

RAW DATA ARRAY DATA

22 35 23 47 23 22 23 23 32 34
40 43 48 34 49 35 36 36 40 43
32 36 36 47 50 47 47 48 49 50

Measurement Scales
- Qualitative data may be converted to quantitative data by a process called measurements.
By measurements, numbers are used to code objects or items so that they can be treated
statistically.
- Measurement refers to the process of determining the value or label, either qualitative or
quantitative, of a particular variable for a particular unit of analysis.

VIII. VARIABLES

Variable is defined as a characteristics or attribute of persons or objects, which can assume

different values for different persons or objects.

Classification of Variables

A. According to Functional Relationship

1. Independent Variable - This is called as the predictor variable.

2. Dependent Variable - This is called as the criterion variable.

Example:
The academic performance of students is dependent on the IQ and attitude of students
towards Statistics.

Independent Variable: IQ and attitude of students towards Statistics

Dependent Variable: The academic performance of students

B. According to Continuity of Values

1. Discrete Variables - These are variables that cannot take the form of decimals. Values can
be counted using integral values.
Examples:
Number of students
Number of houses
Size of a family
Number of enrollee
Drop-outs
Deaths
2. Continuous Variables - These are variables that can take the form of decimals. Can assume
any numerical value over an interval or intervals.
Examples:
Prices of commodities
Weight
Average grade in school
Height
Time
Temperature

C. According to the Levels of Measurement

1. Nominal Scale

- When numerical values or symbols are used to classify an object, person, or characteristics
to identify groups to which various objects, persons, or characteristics belong. They are used
merely for classification or identification purposes only.
- This is characterized by data that consists of names, labels, or categories only. The data
also cannot be arranged in an ordering scheme.

Examples:

Civil Status, Gender, Nationality, Religion, Color of the skin, Assigning of numbers of
houses

2. Ordinal Scale

- This is a level of measurement which contains the properties of the nominal level, but also
gives arrangement of members of particular grouped in order, rank, or ordered in some low-to-
high manner. Inequality of properties between data values cannot be determined.

Examples:

Ranks given to the winners of a quiz bee contest

Rank of CPA passers based on their board rating
Good, better, or best choice in selecting learning practices
Level of difficulty of questions

3. Interval Scale

- Contains the properties of the ordinal level but the distances between any two numbers on
the scale are of known sizes.
- Characterized by a common and constant unit of measurement
- Units of measurement are arbitrary
- Indicate an actual amount and there is equal unit of measurement separating each score,
specifically equal intervals.

Examples:

Temperature in degrees (Celsius/Fahrenheit)

Intelligence Quotient (75, 100, 120, 150, …)
4. Ratio Scale

- Contains the properties of the interval level but it has a true zero point, that is, the number
zero indicates the absence of the characteristic under consideration.
- This refers to a property defined by an operation which permits making of statements of
equality of ratios in addition to statements of sameness of differences, greater than or less than,
and equality or inequality of differences.
- Strongest level of measurement

Examples:
Height in meters, feet, inches
Weight in kilograms, pounds
Speed of a car
Time to build a house