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STA 404
Statistics for Business and Social Sciences

Chapter 1: Introduction to Statistics

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
 Chapter 1
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Section 1 - 2 Contents
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Contents

I What is statistics
I Descriptive and inferential statistics
I Statistical terms
I Types of variable
I Level of data measurement
I Sampling Techniques
I Sources of data

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
 Chapter 1
Section 1 - 1
Applying the Concepts 1 - 1 What is statistics
Section 1 - 2 Descriptive and inferential statistics
Applying the Concepts 1 - 2 Statistical terms
Section 1 - 3
Applying the Concepts 1 - 3

Quoted from thestar.com.my, Business News, 5 September

2015

The countrys international reserves rose RM1.3 bil to RM 357.7 bil

(US$ 94.7b) as at Aug 28 from two weeks ago, Bank Negara said.
..
.
According to the data, the international reserves have fallen from
RM 405.5 bil (or US$116.0 bil) as at Dec 31, 2014 compared with
RM 441.9 bil (US$ 134.9 bil) as at end-2013. It dipped below
US$100 bil - the first time since 2010 - to US$ 96.7 bil as at July
31, Bloomberg reported.
..
.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
 Chapter 1
Section 1 - 1
Applying the Concepts 1 - 1 What is statistics
Section 1 - 2 Descriptive and inferential statistics
Applying the Concepts 1 - 2 Statistical terms
Section 1 - 3
Applying the Concepts 1 - 3

Quoted from thestar.com.my, News, 6 September 2015

..
.
The World Travel and Tourism Council (WTTC) has estimated
that the direct contribution from tourism to the GDP will increase
from RM 70.4 bil in 2013 to RM 115.4 bil in 2024.
The tourism growth would also see jobs related to the industry
grow from 881, 000 to 1, 254, 000 within the same period, said
Liow.
..
.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
 Chapter 1
Section 1 - 1
Applying the Concepts 1 - 1 What is statistics
Section 1 - 2 Descriptive and inferential statistics
Applying the Concepts 1 - 2 Statistical terms
Section 1 - 3
Applying the Concepts 1 - 3

So, what is statistics?

Statistics is the science of conducting studies to collect, organise,

summarise, analyse and draw conclusions from data

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Applying the Concepts 1 - 1 What is statistics
Section 1 - 2 Descriptive and inferential statistics
Applying the Concepts 1 - 2 Statistical terms
Section 1 - 3
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Some terminologies

I A variable is a characteristic or attribute that can assume

different values.
I Data are the values (measurements or observations) that the
variables can assume.
I Variables whose values are determined by chance are called
random variables.
I A collection of data values forms a data set.
I Each value in the data set is called a data value or a datum.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Section 1 - 1
Applying the Concepts 1 - 1 What is statistics
Section 1 - 2 Descriptive and inferential statistics
Applying the Concepts 1 - 2 Statistical terms
Section 1 - 3
Applying the Concepts 1 - 3

Two areas of statistics

1. Descriptive statistics consists of the collection, organisation,

summarisation and presentation of data.
I Describes a situation from the data
2. Inferential statistics consists of generalising from samples to
populations, performing estimations and hypothesis tests,
determining relationships among variables, and making
projections.
I Makes inferences from samples to populations
I Uses probabilities

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
 Chapter 1
Section 1 - 1
Applying the Concepts 1 - 1 What is statistics
Section 1 - 2 Descriptive and inferential statistics
Applying the Concepts 1 - 2 Statistical terms
Section 1 - 3
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Important statistical terms

I A population consists of all subjects (human or otherwise)

that are being studied.
I A sample is a group of subjects selected from a population.
I Hypothesis testing is a decision-making process for
evaluating claims about a population, based on information
obtained from samples.
Note: if the subjects in a sample are properly selected, then they should
possess the same/similar characteristics as the subjects in the population.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Applying the Concepts

A study conducted at ABC college revealed that students who attended

class 95 to 100% of the time usually received an A in the class. Students
who attended class 80 - 90% of the time usually received a B or C.
Students who attended class less than 80% of the time usually recieved a
D or an F or eventually withdrew from the class.
Based on this information, attendance and grades are related. The more
you attned class, the more likely it is you will receive a higher grade. If
you improve your attendance, your grades will improve. Manay factors
affet your grade in a course. One factor that you have considerable
control over is attencance. You can increase your oppotunities for
learning by attending class more often.

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Questions

1. What are the variables under study?

2. What are the data in the study?
3. Are descriptive, inferential or both types of statstics used?
4. What is the population under study?
5. Was a sample collected? If so, from where?
6. From the information given, comment on the relationship
between the variables.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Level of data measurement
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Two types of variables

1. Qualitative variables are variables that can be placed into

distinct categories, according to some characteristics or
attributes. E.g.: gender, geographic locations, etc.
2. Quantitative variables are numerical and can be ordered or
ranked. E.g.: age, heights, time, etc.
I Discrete variables assume values that can be counted.
I Continuous variables can assume an infinite number of
values between any two specific values. They are obtained by
measuring. They often include fractions and decimals.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Recorded values and boundaries for continuous data

Since continuous data must be measured, answers must be

rounded (usually to the nearest given unit) because of the limits of
the measuring device.

Variable Recorded value Boundaries

Length 10 cm 9.5 10.5 cm
Time 0.25 sec 0.245 0.255 sec

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Classifying the variables according to how they are

catogerised, counted and measured

I Can the data be orgainsed into specific categories like types of

properties (condominiums, houses, shops)?
I Can the data values be ranked, such as first, second, third,
etc?
I Or, are the values obtained from measurement, like length or
time?
We use measurement scales to classify how the variables are
categorised, counted or measured, i.e., nomimal, ordinal, interval
and ratio.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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The first level: nomimal

The nominal level of measurement classifies data into mutually

exclusive (nonoverlapping) categories in which no order or ranking
can be imposed on the data.
Examples: subjects taught, gender, political parties, marital status,
etc.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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The next level: ordinal

The ordinal level of measurement classifies data into categories

that can be ranked; however, precise differences between the ranks
do not exist.
Examples: size of a building (small, medium, large), services
provided by a waiter/waitress (good, satisfactory, poor), Results of
an examination (grades A, B, C, D, F), etc.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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The third level: interval

The interval level of measurement ranks data, and precise

differences between units of measure do exist; however there is no
meaningful zero.
Examples: IQ, temperature, etc.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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The final level: ratio

The ratio level of measurement possesses all the characteristics

of an interval measurement, and there exists a true zero. In
addition, true ratios exist when the same variable is measured on
two different members of the population.
Examples: height, weight, number of phone calls made, etc.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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BUT . . .

There is no complete agreement among statisticians about the

classification of data into one of the four categories. For instance,
some reseachers classify IQ data as ratio data rather than interval.
Besides, data can be altered so that they can fit into a different
category. For example, if the incomes of all lecturers of a college
are classified into three categories low, average and high, then a
ratio variable becomes an ordinal variable.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Types of variables
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Examples of Measurement Scales

Nominal Ordinal Interval Ratio

Nationality Grade SAT score Height
(A, B, C, D, F)
Gender Judging IQ Salary
(first, second, . . .)
Hair Colour Rating Scale Temperature Time
(poor, average, good)

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Applying the Concepts

The chart shows the number of job-related injuries for each of the
transportation industries in 1998.

Industry Number of Injuries

Railroad 4520
Intercity bus 5100
Subway 6850
Trucking 7144
Airline 9950

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Questions

1. What are the variables under study?

2. Categorise each variable as quantitative or qualitative.
3. Categorise each quantitative variable as discrete or continuous.
4. Identify the level of measurement for each variable.
5. The railroad is shown as the safest transportation industry.
Does that mean railroads have fewer accidents than the other
industries? Explain.
6. What factors other than safety influence a persons choice of
transportation?
7. From the information given, comment on the relationship
between the variables.
Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Data collection

In research, statisticians use data mainly to describe situations and

events.
Data can be collected in many different ways, for example:
I surveys (most common method) such as telephone surveys,
mailed questionnaire and personal interview.
I direct observations of situations/events

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Usefulness of using samples

I Researchers use samples to collect data and information about

a particular variable from a LARGE population.
I Using samples saves time and money.
I Sometimes enables researchers to get more detailed
information about a particular subject.
Note: Samples obtained must be unbiased, i.e., each subject in
the population has an equal chance of being selected.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Four basic methods of sampling

I Simple random sampling

I Systematic sampling
I Stratified sampling
I Cluster sampling

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Random sampling

Random samples selected using the chance method.

Step 1 Number each subject in the population.
Step 2 Place the numbered cards in a bowl, mix them
thoroughly and draw as many as required.
Step 3 The subjects whose numbers are drawn constitute
the sample.
But if the numbered cards are not mixed thoroughly, we may end
up with a biased sample. As such, an alternative method is
through the use of random numbers.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Random numbers

79 41 71 93 60 35 04 67 96 04 79 10 86
26 51 53 13 43 50 92 09 87 21 83 75 17
18 13 41 30 56 20 37 74 49 56 45 46 83
19 82 02 69 34 27 77 34 24 93 16 77 00
14 57 44 30 93 76 32 13 55 29 49 30 77

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Use random numbers to select a random sample

To select a random sample of 20 out of 95 subjects.

Step 1 Number each subject from 01 to 95.
Step 2 Randomly choose a number to begin with.
Step 3 Select 20 numbers from the first number either by
moving row wise or column wise.
Step 4 Skip the number if the number is 00, more than 95
or a number that has already been chosen.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Systematic sampling

Systematic samples can be obtained by

Step 1 numbering each subject in the population;
Step 2 selecting every k th subject.
Example:
If there are 1500 subjects in the population and we need a sample
of say 50 subjects, then k = 30 (= 1500 50).
In order to select this systematic sample, the first subject will be
randomly selected from 1 to 30 and every 30th subject from the
first subsequently.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Stratified sampling

Stratified samples can be obtained by

Step 1 dividing the population into groups, called strata
according to some characteristic;
Step 2 randomly selecting the samples within each stratum.
Example:
Mindset of the hotel and accounting students regarding STA 404.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Cluster sampling

Cluster samples can be obtained by

Step 1 dividing the population into groups, called clusters by
some means;
Step 2 randomly selecting some clusters and using all the
members in the selected clusters as subjects of the
samples.
Note: Cluster sampling is used when the population is large or
when it involves subject residing in a large geographic area.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Two sources of data

I Primary data - Collected by the researchers themselves.

I Secondary data - Published data, collected by other parties.

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Applying the Concepts I

The National Electricity Ltd. branch in Klang is conducting a

survey to find out the average monthly consumption of electricity
in a housing estate. The area consists of 20 blocks of double storey
houses. Each block consists of ten houses. A random sample of
five blocks is selected. All the houses in each block are included as
units in the sample.
1. Determine the population in the survey
2. What is the variable of interest?
3. What is the sampling technique used?

Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences
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Applying the Concepts II

The management of UiTM is interested in obtaining information
on problems which influence the students academic performance.
Among the problems identified are a lack of study skills, low
motivation, peer influence, disciplinary problems and a lack of
recreation or sports facilities. UiTM has 14 campuses located
throughout Malaysia. Suppose you are asked to carry out the
above research:
1. identify the population of interest.
2. What method of sampling would you use? Explain.
3. How are you going to obtain the sampling frame for this
study?
4. State the variables of interest in this study.
Chapter 1: Introduction to Statistics STA 404 Statistics for Business and Social Sciences