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Week1 OverviewOfStatistics

This document provides an overview of statistics, including definitions, types, reasons for studying it, and uses. It defines statistics as the science of collecting, organizing, analyzing, interpreting, and presenting quantitative data. Descriptive statistics summarize and describe data, while inferential statistics allow generalizing from samples to populations. Studying statistics helps make objective, accurate decisions and predictions and avoid being misled. It also discusses how statistics are used in various fields like auditing, marketing, healthcare, and more.

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TRan Trinh
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
55 views

Week1 OverviewOfStatistics

This document provides an overview of statistics, including definitions, types, reasons for studying it, and uses. It defines statistics as the science of collecting, organizing, analyzing, interpreting, and presenting quantitative data. Descriptive statistics summarize and describe data, while inferential statistics allow generalizing from samples to populations. Studying statistics helps make objective, accurate decisions and predictions and avoid being misled. It also discusses how statistics are used in various fields like auditing, marketing, healthcare, and more.

Uploaded by

TRan Trinh
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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8/29/2022

Overview of
Statistics

Content

◉ What is statistics?
◉ Types of statistics
◉ Why study statistics?
◉ Uses of statistics

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What is statistics? - Example

Statistics Statistic
The science of collecting, A single measure, reported
organizing, analyzing, as a number, used to
interpreting, and presenting summarize a sample data set.
data.

Statistics
is a way to get information from data.

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What is statistics

◉ The annual earnings of college graduates


exceed, on average, those of high school
graduates by $20,000.
◉ Heavy users of tobacco suffer significantly
more respiratory ailments than do nonusers.

Types of Statistics

◉ Descriptive statistics: ◉ Inferential statistics:


collection, organization, generalizing from a
presentation, and sample to a population,
summary of data estimating unknown
population parameters,
drawing conclusions,
and making decisions.

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Example of descriptive statistics

Best-selling Girl Scout cookies


Source: “Best-Selling Girl Scout
Cookies,” based on www.girlscouts.org.

The best-selling variety is _________,


followed by _________ and _________

Example of inferential statistics


The data for the 10 companies with
the highest ratio in the sample
of 168 companies

An analysis of the data for all


168 firms revealed that the
“average” ratio of CEO pay to
typical worker pay was 205

INFER

the average ratio of CEO pay to


typical worker pay for all US
firms is 205.

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Review Question
Indicate whether each of the following statements typifies descriptive
statistics (because it describes sets of actual observations) or inferential
statistics (because it generalizes beyond sets of actual observations).
a) Students in my statistics class are, on average, 23 years old.
b) The population of the world exceeds 7 billion.
c) Either four or eight years have been the most frequent terms of
office actually served by U.S. presidents.
d) Sixty-four percent of all college students favor right-to-abortion
laws.

Why study Statistics?

◉ Help to make objective decisions and accurate


predictions.
◉ Can tell if statistics are accurate or misleading
 not easily get fooled.
◉ Other reasons: communication, computer
skills, information management, technical
literacy, and process improvement.

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Example of “Fake News” vs.


Actual Information

◉ There is a strong correlation ◉ Survey sent to CEOs of 300


between a CEO’s golf handicap largest US companies; only
and the company’s stock 51 revealed their golf
performance: The lower the handicaps. Data for several
CEO’s handicap (i.e., the better top-ranking CEOs were
the golfer), the better the stock excluded from the analysis.
performs. (New York Times, May
31, 1998)

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Example of “Fake News” vs.


Actual Information
◉ In an advertisement, “more than ◉ The survey allowed each
80% of dentists surveyed dentist to recommend more
recommend Colgate toothpaste than one toothpaste. The
to patients.” (Colgate-Palmolive Advertising Standards
Company, January 2007) Authority cited and fined
Colgate for a misleading ad
(implying 80% of dentists
recommend Colgate
toothpaste in preference to
all other brands) and
banned the advertisement. 12

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Example of “Fake News” vs.


Actual Information
◉ An advertisement for Kellogg’s ◉ Only half of the kids in the
Frosted Mini-Wheats claimed that study showed any
the cereal was “clinically shown to improvement in attentiveness;
improve kids’ attentiveness by only 1 in 7 improved by 18% or
nearly 20%.” (Kellogg Company, more, and only 1 in 9 improved
2009) by 20% or more; kids who ate
Frosted Mini-Wheats were
compared against kids who had
only water for breakfast. (The
Kellogg Company agreed to pay
$4 million to settle suit over
false ad claim.)
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Example of “Fake News” vs.


Actual Information
◉ NPR reported on a recent study that ◉ Data was based on teen’s
teens who spend five or more hours perceived use of their
per day on their smartphones are 71 smartphones. Studies have
percent more likely to have one risk shown that perceived use is
factor for suicide/depression poorly related to actual use
(Journal of Abnormal Psychology, measured with an app. Also,
March 2019). the measures of addiction or
suicide risk were based on
unreliable scales.

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Why study Statistics?

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Uses of statistics

◉ Auditing: sample from over 12,000 invoices to


estimate the proportion of incorrectly paid
invoices.
◉ Marketing: identify likely repeat customers for
Amazon and suggest co-marketing opportunities
based on a database containing records of 5
million Internet purchases.

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Uses of statistics

◉ Healthcare: evaluate 100 incoming patients


using a 42-item physical and mental assessment
questionnaire.
◉ Quality Improvement: initiates a triple inspection
program, sets penalties for workers who
produce poor-quality output,

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Uses of statistics

◉ Purchasing: determine the defect rate of s


shipment and whether that rate has changed
significantly over time.
◉ Medicine: determine whether a new drug is
really better than the placebo of if the difference
is due to chance.

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Uses of statistics

◉ Operations Management: manage inventory by


forecasting consumer demand.
◉ Product Warranty: determine the average dollar
cost of engine warranty claims on a new hybrid
engine.

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Review Questions

◉ A National Health Interview Survey conducted by the


U.S. Centers for Disease Control reported that using a
cell phone instead of a landline appeared to double a
person’s chances of binge drinking. “I guess I’d better
give up my cell phone,” said Bob. Which fallacy, if any,
do you see in Bob’s reasoning?

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Review Questions

◉ “My Aunt Harriet smoked all her life and lived to 90.
Smoking doesn’t hurt you.” Do you agree?

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Review Questions

◉ Analysis of 1,064 deaths of famous popular musicians


showed that 31 percent were related to alcohol or drug
abuse. “But that is just a sample. It proves nothing,” said
Hannah. Do you agree with Hannah’s conclusion? Explain.

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Review Questions
Indicate whether each of the following statements typifies Descriptive Statistics or
Inferential Statistics:
a) A graph showing the annual change in global temperature during the last 30 years
b) A pollster’s claim that a majority of all U.S. voters favor stronger gun control laws
c) An assertion about the relationship between job satisfaction and overall
happiness
d) A report that describes the average difference in grade point average (GPA)
between college students who regularly drink alcoholic beverages and those who
don’t

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