Introduction

to Statistical Methods

ISM Team
 BITS Pilani

Overview of the course

& Basic Probability & Statistics (CS -1)
(Session 1: 25th /26th May, 2024)
IMP Note to Self
 Overview of the course
 M 1 : Basic Probability & Statistics

 M 2 : Conditional Probability & Bayes’ theorem

 M 3 : Probability Distributions

 M 4 : Hypothesis Testing

 M 5 : Prediction & Forecasting

 M 6 : Prediction & Forecasting Gaussian Mixture model &

Expectation Maximization
 TEXT BOOKS

T1 : Statistics for Data Scientists, An introduction to Probability,

Statistics and Data Analysis, Maurits Kaptein et al,Springer 2022

T2 : Probability and Statistics for Engineering and Sciences,

8th Edition, Jay L Devore, Cengage Learning

T3 : Introduction to Time Series and Forecasting, Second Edition,

Peter J Brockwell, Richard A Davis, Springer.
 Evaluation Components

No Name Type Weight

EC-1(a) Quizzes – 1 ,2 & 3 Online 10%

(Best two will be considered)
EC-1(b) Assignments - 2 Online 20%

EC-2 Mid-Semester Test Closed Book 30%

EC-3 Comprehensive Exam Open Book 40%

Module 1: (Basic Probability & Statistics)

Contact List of Topic Title Reference

Session

Measures of Central T1 & T2

Tendency & Measures of
CS - 1 Variability,
Data – Symmetric &
Asymmetric, outlier
detection, 5 point summary,
Introduction to probability
“Statistical thinking will be one day as
necessary for efficient citizenship as the
ability to read and write”

H G Wells
Statistics
Statistics may be defined as science that is employed
to
 Collect the data
 Present and organize the data in a systematic
manner
 Analyse the data
 Infer about the data
 Take decision from the data.

In other words, Statistics can also be defined as

numerical data with a view to analyse it.
 Types of Variable

Quantitative(Numerical):
Qualitative (Categorical): express
measured in terms of numbers
a qualitative attribute such as hair
such as height, weight, number of
color, eye color, religion.
people.

Nominal: Ordinal:
Discrete: Continuous: not
No ordering is Ordering is possible
countable and have countable and
possible such as hair such as health, which
a finite number of have an infinite
color, eye color, can take values such
possibilities such number of
religion. as poor, reasonable,
as number of people possibilities such
good, or excellent.
as height

INTERVAL: ratio of values of

RATIO: ratio of values of variable
variable do not have any meaning
have meaning and it have an
and it does not have an inherently
inherently defined zero value such
defined zero value such as
as length
temperature
Example

Question Type of Variable

Types of vehicle owned Categorical : Nominal
Two wheeler, four wheeler
Product satisfaction Categorical : Ordinal
Unsatisfied, neutral, fairly satisfied, satisfied
To how many magazines do you currently Discrete
subscribed
Zero, One, Two, Three, Four
How tall are you (in inches) Continuous : Ratio
Weight (in Kilograms) Continuous : Ratio
Temperature (in degrees Celsius or degrees Continuous : Interval
Fahrenheit)
Measures of Central Tendency

• Measure of central tendency provides a very convenient

way of describing a set of scores with a single number
that describes the PERFORMANCE of the group.

• Also defined as a single value that is used to describe the

“center” of the data.

• Three commonly used measures of central tendency:

1. Mean
2. Median
3. Mode
Mean
• Also referred as the “arithmetic average”
• The most commonly used measure of the center of data
• Numbers that describe what is average or typical of the
distribution
• Computation of Sample Mean:
 Y = Σ Y/ N = (Y1 + Y2 + Y3 + … Yn) / N where
Y
N “Y bar” equals the sum of all the scores, Y, divided by the
number of scores, N.
• Computation of the Mean for grouped Data
 f Y
Where f Y = a score multiplied by its frequency
Y 
N
Mean: Ungrouped Data
Suppose you define the time to get ready as the time (rounded to the
nearest minute) from when you get out of bed to when you leave your home.
You collect the times shown below for 10 consecutive work days:

Day 1 2 3 4 5 6 7 8 9 10
Time 39 29 43 52 39 44 40 31 44 35
(min)

The mean time is 39.6 minutes, computed as follows:

Mean: Grouped Scores

Data of Children watching TV in Bengaluru

Mean
Properties

• It measures stability. Mean is the most stable among other

measures of central tendency because every score contributes
to the value of the mean.
• It may easily affected by the extreme scores.
• The sum of each score’s distance from the mean is zero.
• It can be applied to interval level of measurement
• It may not be an actual score in the distribution
• It is very easy to compute.
Mean
When to Use the Mean

• Other measures are to be computed such as standard

deviation, coefficient of variation and skewness

• Sampling stability is desired.

The Mode
• The category or score with the largest frequency (or
percentage) in the distribution.
• The mode can be calculated for variables with levels of
measurement that are: nominal, ordinal, or interval-ratio.
Example: A systems manager in charge of a company s network keeps track of
the number of server failures that occur in a day. Compute the mode for the
following data, which represents the number of server failures in a day for the
past two weeks:.
1 3 0 3 26 2 7 4 0
2 3 3 6 3
Because 3 appears five times, more times than any other value, the mode is 3.
Thus, the systems manager can say that the most common occurrence is having
three server failures in a day.
Mode
Properties

• It can be used when the data are qualitative as well as

quantitative.
• It may not be unique.
• It is not affected by extreme values.
When to Use the Mode

o When the data set is measured on a nominal scale

The Median
• The score that divides the distribution into two equal parts, so
that half the cases are above it and half below it.
• You compute the median value by following one of two rules:
Rule 1 If there are an odd number of values in the data set, the median
is the middle-ranked value.
Rule 2 If there are an even number of values in the data set, then the
median is the average of the two middle ranked values.
• The median is the middle score, or average of middle scores in
a distribution.
o Fifty percent (50%) lies below the median value and 50%
lies above the median value.
o It is also known as the middle score or the 50th
percentile.
Median
Example-1: The three-year annualized returns for the seven small-cap
growth funds with low risk are ranked from the smallest to the largest:

19.0 20.8 22.3 22.4 24.9 26.0 29.9

The Median is the 4th position value i.e. 22.4.

Example-2: Consider the time taken for reaching office from home in
minutes arranged from lowest to highest

29 31 35 39 39 40 43 44 44 52

The number of observations are 10. Hence the median is the average of
values at the 5th and 6th Position, i.e. average of 39 and 40 = 39.5
Data : Symmetrical and Asymmetrical
Shape of the distribution of data
 Symmetrical : Mean is equal to median
 Skewed
 Negatively (Left): mean < median
Distributions with a left skew have long left
tails;
 Positively (Right) : mean > median
Distributions with a right skew have long
right tails.
 Bimodal : has two distinct modes
 Multi-modal : has more than 2 distinct modes
Types of Distribution
Why mean is not enough?

Sl. No. X1 Statistical Group

1 2 measures 1
2 8 Mean 5
3 5
4 3
Median 5
5 7 Mode 5
6 8
7 5
8 2
9 5
Total 45
 X2 Statistical
Sl. No. Group
1 1 measures 2
2 15
3 5 Mean 5
4 5
5 6
Median 5
6 3 Mode 5
7 5
8 2
9 3
Total 45
 Sl. X1 X2
No.
1 2 1
Statistical Group
2 8 15
measures 1&2
3 5 5
4 3 5 Mean 5
5 7 6 Median 5
6 8 3
Mode 5
7 5 5
8 2 2
9 5 3
Total 45 45
 Do we need any other measure?

Answer: Yes

Measures of variability
Three Measures of Variability:

• The Range
• The Variance
• The Standard Deviations
Measure of Variability
Variability can be defined several ways:
• A quantitative distance measure based on the
differences between scores
• Describes distance of the spread of scores or
distance of a score from the mean
Purposes of Measure of Variability:

• Describe the distribution

• Measure how well an individual score
represents the distribution
The Ranges
• The distance covered by the scores in a distribution – From
smallest value to highest value
• For continuous data, real limits are used

Range = URL for Xmax - LRL for Xmin

• Based on two scores, not all the data – An imprecise, unreliable

measure of variability

Example: For a set of scores: 7, 2, 7, 6, 5, 6, 2

Range = Highest Score minus Lowest score = 7 - 2 = 5

The Standard Deviation
• Most common and most important measure of variability is the
standard deviation

o A measure of the standard, or average, distance from the

mean

o Describes whether the scores are clustered closely around

the mean or are widely scattered

• Calculation differs for population and samples

• Variance is a necessary companion concept to standard deviation
but not the same concept
The Standard Deviation

Exercise : Find out the deviations of all the data points with
the mean….and then find the ‘mean deviation’.
The Standard Deviation

• Mean deviations will always be ‘zero’ !

(because Mean is a balance point)

Then, how do you find ‘Standard Deviation’ ?

Need a new strategy

The Standard Deviation

New Strategy :

a) First square each deviation score

b) Then sum the Squared Deviations (SS)
c) Average the squared deviations

• Mean Squared Deviation is known as “Variance”

• Variability is now measured in squared units
The Variance

Variance equals mean (average) squared deviation

(distance) of the scores from the mean

where
The Population Variance

 Population variance equals mean (average) squared

deviation (distance) of the scores from the population
mean

 Variance is the average of squared deviations, so we identify

population variance with a lowercase Greek letter sigma
squared: σ^2

 Standard deviation is the square root of the variance, so we

identify it with a lowercase Greek letter sigma: σ
 Sl. X1 X2
No.
1 2 1
Statistical Group
2 8 15
measures 1&2
3 5 5
4 3 5 Mean 5
5 7 6 Median 5
6 8 3
Mode 5
7 5 5
8 2 2
9 5 3
Total 45 45
 Sl. X1
No.
1 2 9
2 8 x 45 i
3 5 X 1
5
4 3 N 9
5 7
6 8
7 5
8 2
9
Total
5
45 𝐒=
√𝟒𝟒
𝟖
=𝟐. 𝟑𝟒𝟓
 Sl. X2
No.
1 1 9
2 15 x
45 i
3 5 X 1
5
4 5 N 9
5 6
6 3
7 5
8 2
9
Total
3
45
𝐒=
√𝟏𝟑𝟒
𝟖
=𝟒.𝟎𝟗𝟑
Learning Check

a) If all the scores in a data set are the same, the True /
Standard Deviation is equal to 1.00 False ?

Select the correct option

b) The standard deviation measures …

(1) Sum of squared deviation scores
(2) Standard distance of a score from the mean
(3) Average deviation of a score from the mean
(4) Average squared distance of a score from
the mean
Solution

a) If all the scores in a data set are the same, they

False
are equal to the mean and hence the deviation
from mean = 0 therefore, Standard Deviation is
equal to zero

b) The standard deviation measures …

(1) Sum of squared deviation scores
(2) Standard distance of a score from the mean
(3) Average deviation of a score from the mean
(4) Average squared distance of a score from
the mean
Standard Deviation and
Variance for a Sample
• Goal of inferential statistics:
o Draw general conclusions about population based on
limited information from a sample

• Samples differ from the population

o Samples have less variability

o Computing the Variance and Standard Deviation in the

same way as for a population would give a biased
estimate of the population values
Sample Standard Deviation and Variance

• Sum of Squares (SS) is

computed as before
• Formula for Variance
has n-1 rather than N
in the denominator
• Notation uses s
instead of σ
Degrees of Freedom

• Population variance
o Mean is known
o Deviations are computed from a known mean

• Sample variance as estimate of population

o Population mean is unknown
o Using sample mean restricts variability

• Degrees of freedom
o Number of scores in sample that are independent and
free to vary
o Degrees of freedom (df) = n – 1
Learning Check

Select the correct option

a) A sample of four scores has SS = 24. What is the

variance?
(1) The variance is 6
(2) The variance is 7
(3) The variance is 8
(4) The variance is 12
b) A sample systematically has less variability than a True /
population False ?
c) The standard deviation is the distance from the
True /
Mean to the farthest point on the distribution False ?
curve
Solution

Select the correct option

a) A sample of four scores has SS = 24. What is the

variance?
(1) The variance is 6
(2) The variance is 7
(3) The variance is 8
(4) The variance is 12
b) Extreme scores affect variability, but are less
True
likely to be included in a sample
c) The standard deviation extends from the mean
False
approximately halfway to the most extreme
score
Descriptive Statistics
• A standard deviation describes scores in terms of distance from
the mean
• Describe an entire distribution with just two numbers (M and s)
• Reference to both allows reconstruction of the measurement
scale from just these two numbers
• Means and standard deviations together provide extremely
useful descriptive statistics for characterizing distributions
Five point summary of Data

The five number summary of data includes 5 items:

 Minimum.

 Q1 (the first quartile, or the 25% mark).

 Median.

 Q3 (the third quartile, or the 75% mark).

 Maximum.
Interquartile range (IQR)

• It is measure of Variation
• Also Known as Mid-spread : Spread in the Middle 50%
• Difference Between Third & First Quartiles:
• Not Affected by Extreme Values
Interquartile Range = IQR = Q3 – Q1

Data in Ordered Array: 11 12 13 16 16 17 17 18 21

1•(9 + 1)
Position of Q1 = = 2.50, Q1 =12.5
4
3•(9 + 1)
Position of Q3 = = 7.50, Q3 =17.5
4

Interquartile Range = IQR= Q3 – Q1 = 17.5 - 12.5 = 5

Box and Whisker plot

IQR = Q3 – Q1
Q1-1.5 IQR Q3+1.5 IQR

Min Max
Q1 Q2 Q3
Outlier Outlier
Box-and-Whisker plot

IQR = Q3 – Q1

Min Q1-1.5 IQR Q3+1.5 IQR

Max
Q1-3 IQR Q1 Q2 Q3 Q3+3 IQR
Major Outlier Major Outlier
Potential outliers

 The lower limit and upper limit of a data set are given by:

Lower limit = Q1 - 1.5 x IQR

Upper limit = Q3 + 1.5 x IQR

 Data points that lie below the lower limit or above the upper
limit are potential outliers.
Glossary

Measures of Central Tendency:

Mean, Median, Mode

Measures of Variability: Range, Standard Deviation , Variance

Shape of the distribution

Five point summary

Outliers
Practice Problems:
1. The data given below is the total fat, in grams per serving, for a
sample of 20 chicken sandwiches from fast-food chains.
7 8 4 5 16 20 20 24 19 30 23 30 25 19 29 29 30 30 40 56
a. Compute the mean, median, first quartile, and third quartile.
b. Compute the variance, standard deviation, range, interquartile range, Are
there any outliers? Explain.
c. Are the data skewed? If so, how?
d. Based on the results of (a) through (c), what conclusions can you reach
concerning the total fat of chicken sandwiches?
2. The following data represent the battery life (in shots) for
three pixel digital cameras:
300 180 85 170 380 460
260 35 380 120 110 240

List the Five-point summary.

82 45 64 80 82 74 79 80 80 78 80 80 48 73 80 79 81 70 78 73

3. For the data set below:

a. Obtain and interpret the quartiles.

b. Determine and interpret the interquartile range.
c. Find and interpret the five-number(point) summary.
d. Identify potential outliers, if any.
e. Construct and interpret a boxplot.
4. A bank branch located in a commercial place of a city has developed an
improved process for serving customers during the noon-to-1:00 p.m. lunch
period. The waiting time, in minutes (defined as the time the customer enters the
line to when he or she reaches the teller window), of a sample of 15 customers
during this hour is recorded over a period of one week. The results are: 4.21,
5.55, 3.02, 5.13, 4.77, 2.34, 3.54, 3.20, 4.50, 6.10, 0.38, 5.12, 6.46, 6.19,
3.79.
Another branch, located in a residential area, is also concerned with the noon-to-1
p.m. lunch hour. The waiting time, in of a sample of 15 customers during this hour
is recorded over a period of one week. The results are listed below: 9.66, 5.90,
8.02, 5.79, 8.73, 3.82, 8.01, 8.35, 10.49, 6.68, 5.64, 4.08, 6.17, 9.91, 5.47.

a. List the five-number summaries of the waiting times at the two bank branches.
b. Construct box-and-whisker plots and describe the shape of the distribution of
each for the two bank branches.
c. What similarities and differences are there in the distributions of the waiting
time at the two bank branches?
IMP Note to Self
Thank You