Unit 3

Exploring Data
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publicly accessible website, in whole or in part.

Chapter 2
DECISION MAKING
DATA ANALYSIS AND
BUSINESS ANALYTICS:

Describing the Distribution of a Single Variable

Introduction
(slide 1 of 2)

 The goal is to present data in a form that makes

sense to people. Tools that are used to do this
include:
 Graphs: bar charts, pie charts, histograms, scatterplots,
time series graphs
 Numerical summary measures: counts, percentages,
averages, measures of variability
 Tables of summary measures: totals, averages, counts,
grouped by categories
 It is a challenge to summarize data so that the
important information stands out clearly.
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Introduction
(slide 2 of 2)

 There are four steps in data analysis:

1. Recognize a problem that needs to be solved.
2. Gather data to help understand and then solve the
problem.
3. Analyze the data.
4. Act on this analysis.
 It is up to you to ask good questions—and then
take advantage of the most appropriate tools to
answer them.

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Populations and Samples
 A population includes all of the entities of interest
in a study (people, households, machines, etc.)
 Examples:
 All potential voters in a presidential election
 All subscribers to cable television
 All invoices submitted for Medicare reimbursement by
nursing homes
 A sample is a subset of the population, often
randomly chosen and preferably representative of
the population as a whole.
 Examples: Gallup, Harris, other polls today
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Data Sets, Variables, and Observations

 A data set is usually a rectangular array of data,

with variables in columns and observations in
rows.
 A variable (or field or attribute) is a characteristic
of members of a population, such as height, gender,
or salary.
 An observation (or case or record) is a list of all
variable values for a single member of a
population.

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Example 2.1:
Questionnaire [Link]
 Objective: To illustrate variables and observations in a typical data
set.
 Solution: Data set includes observations on 30 people who responded
to a questionnaire on the president’s environmental policies.
 Variables include: age, gender, state, children, salary, opinion.

 Include a row that lists variable names.

 Include a column that shows an index of the observation.

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Types of Data
(slide 1 of 5)

 A variable is numerical if meaningful arithmetic

can be performed on it.
 Otherwise, the variable is categorical.
 There is also a third data type, a date variable.
 Excel® stores dates as numbers, but dates are treated
differently from typical numbers.
 A categorical variable is ordinal if there is a
natural ordering of its possible values.
 If there is no natural ordering, it is nominal.

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Types of Data
(slide 2 of 5)

 Categorical variables can be coded numerically or left

uncoded.
 A dummy variable is a 0–1 coded variable for a
specific category.
 It is coded as 1 for all observations in that category and 0
for all observations not in that category.
 Categorizing a numerical variable by putting the data
into discrete categories (called bins) is called binning
or discretizing.
 A variable that has been categorized in this way is called a
binned or discretized variable.
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Environmental Data
Using a Different Coding (slide 3 of 5)

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Types of Data
(slide 4 of 5)

 A numerical variable is discrete if it results from a

count, such as the number of children.
 A continuous variable is the result of an essentially
continuous measurement, such as weight or height.
 Cross-sectional data are data on a cross section of
a population at a distinct point in time.
 Time series data are data collected over time.

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Typical Time Series Data Set
(slide 5 of 5)

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Descriptive Measures for
Categorical Variables

 There are only a few possibilities for describing a

categorical variable, all based on counting:
 Count the number of categories.
 Give the categories names.
 Count the number of observations in each category
(referred to as the count of categories).
 Once you have the counts, you can display them
graphically, usually in a column chart or a pie chart.

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Example 2.2:
Supermarket [Link] (slide 1 of 3)

 Objective: To summarize categorical variables in a large data set.

 Solution: Data set contains transactions made by supermarket
customers over a two-year period.
 Children, Units Sold, and Revenue are numerical.
 Purchase Date is a date variable.
 Transaction and Customer ID are used only to identify.
 All of the other variables are categorical.

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Example 2.2:
Supermarket [Link] (slide 2 of 3)

 To get the counts in column S, use Excel’s COUNTIF function.

 To get the percentages in column T, divide each count by the
total number of observations.
 When creating charts, be careful to use appropriate scales.

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Example 2.2:
Supermarket [Link] (slide 3 of 3)

 Another efficient way to find counts for a categorical variable is to use

dummy (0–1) variables.
 Recode each variable so that one category is replaced by 1 and all others by 0.
 This can be done using a simple IF formula.
 Find the count of that category by summing the 0s and 1s.
 Find the percentage of that category by averaging the 0s and 1s.

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Descriptive Measures for
Numerical Variables

 There are many ways to summarize numerical

variables, both with numerical summary measures
and with charts.
 To learn how the values of a variable are distributed,
ask:
 What are the most “typical” values?
 How spread out are the values?
 What are the “extreme” values on either end?
 Is the chart of the values symmetric about some middle
value, or is it skewed in some direction? Does it have any
other peculiar features besides possible skewness?
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Example 2.3:
Baseball Salaries [Link] (slide 1 of 2)

 Objective: To learn how salaries are distributed across all 2011 MLB
players.
 Solution: Data set contains data on 843 Major League Baseball players in
the 2011 season.
 Variables are player’s name, team, position, and salary.

 Create summary measures of baseball salaries using Excel functions.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 2.3:
Baseball Salaries [Link] (slide 2 of 2)

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Measures of Central Tendency
(slide 1 of 3)

 The mean is the average of all values.

 If the data set represents a sample from some larger
population, this measure is called the sample mean and is
denoted by X.
 If the data set represents the entire population, it is called
the population mean and is denoted by μ.

 In Excel, the mean can be calculated with the

AVERAGE function.
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Measures of Central Tendency
(slide 2 of 3)

 The median is the middle observation when the

data are sorted from smallest to largest.
 If the number of observations is odd, the median is
literally the middle observation.
 If the number of observations is even, the median is
usually defined as the average of the two middle
observations.
 In Excel, the median can be calculated with the
MEDIAN function.

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Measures of Central Tendency
(slide 3 of 3)

 The mode is the value that appears most often.

 In most cases where a variable is essentially
continuous, the mode is not very interesting because it
is often the result of a few lucky ties.
 However, it is not always a result of luck and may
reveal interesting information.
 In Excel, the mode can be calculated with the
MODE function.

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Minimum, Maximum,
Percentiles, and Quartiles

 For any percentage p, the pth percentile is the value such that
a percentage p of all values are less than it.
 The quartiles divide the data into four groups, each with
(approximately) a quarter of all observations.
 The first, second and third quartiles are the percentiles
corresponding to p = 25%, p = 50%,
and p = 75%.
 By definition, the second quartile (p = 50%) is equal to the median.
 The minimum and maximum values can be calculated with
Excel’s MIN and MAX functions, and the percentiles and
quartiles with Excel’s PERCENTILE and QUARTILE
functions.

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Measures of Variability
(slide 1 of 3)

 The range is the maximum value minus the

minimum value.
 The interquartile range (IQR) is the third quartile
minus the first quartile.
 Thus, it is the range of the middle 50% of the data.
 It is less sensitive to extreme values than the range.
 The variance is essentially the average of the
squared deviations from the mean.
 If Xi is a typical observation, its squared deviation from
the mean is (Xi – mean)2.
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Measures of Variability
(slide 2 of 3)

 The sample variance is denoted by s2, and the

population variance by σ2.

 If all observations are close to the mean, their squared deviations

from the mean—and the variance—will be relatively small.
 If at least a few of the observations are far from the mean, their
squared deviations from the mean—and the variance—will be
large.
 In Excel, use the VAR function to obtain the sample variance
and the VARP function to obtain the population variance.
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Measures of Variability
(slide 3 of 3)

 A fundamental problem with variance is that it is in

squared units (e.g., $  $2).
 A more natural measure is the standard deviation,

which is the square root of variance.

 The sample standard deviation, denoted by s, is the
square root of the sample variance.
 The population standard deviation, denoted by σ, is
the square root of the population variance.
 In Excel, use the STDEV function to find the sample
standard deviation or the STDEVP function to find the
population standard deviation.
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Calculating Variance and
Standard Deviation

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Empirical Rules for Interpreting Standard Deviation
(slide 1 of 3)

 The interpretation of the standard deviation can be

stated as three empirical rules.
 If the values of a variable are approximately normally
distributed (symmetric and bell-shaped), then the
following rules hold:
 Approximately 68% of the observations are within one
standard deviation of the mean.
 Approximately 95% of the observations are within two
standard deviations of the mean.
 Approximately 99.7% of the observations are within three
standard deviations of the mean.

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Empirical Rules for Baseball Salaries
(slide 2 of 3)

 The empirical rules should be applied with caution,

especially when the data are clearly skewed, as
illustrated by the calculations for baseball salaries
below.

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Empirical Rules for Interpreting Standard Deviation
(slide 3 of 3)

 The mean absolute deviation (MAD) is the

average of the absolute deviations.

 In Excel, use the AVEDEV function to calculate

MAD.
 There is another empirical rule for MAD: For many
variables, the standard deviation is approximately
25% larger than MAD.

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Measures of Shape
(slide 1 of 2)

 Skewness occurs when there is a lack of symmetry.

 A variable can be skewed to the right (or positively
skewed) because of some really large values (e.g.,
really large baseball salaries).
 Or it can be skewed to the left (or negatively skewed)
because of some really small values (e.g., temperature
lows in Antarctica).
 In Excel, a measure of skewness can be calculated
with the SKEW function.

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Measures of Shape
(slide 2 of 2)

 Kurtosis has to do with the “fatness” of the tails of

the distribution relative to the tails of a normal
distribution.
 A distribution with high kurtosis has many more
extreme observations.
 In Excel, kurtosis can be calculated with the KURT
function.

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Numerical Summary Measures in the
Status Bar and with StatTools

 If you select multiple cells, summary measures

appear for the selected cells in the status bar at the
bottom of the Excel window.
 You can choose the summary measures that appear by
right-clicking the status bar and selecting your
favorites.
 Although Excel’s built-in functions can be used to
calculate a number of summary measures, a much
quicker way is to use the StatTools add-in.

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Example 2.3 (Continued):
Baseball Salaries [Link]
 Objective: To learn the
fundamentals of StatTools and
use it to generate summary
measures of baseball salaries.
 Solution: First, define a StatTools
data set, by selecting any cell in
the data set and clicking the Data
Set Manager button.
 Then generate summary measures
for the Salary variable, by
selecting One-Variable Summary
from the Summary Statistics
dropdown list and filling in the
dialog box that appears.

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Charts for Numerical Variables
 There are many graphical ways to indicate the
distribution of a numerical variable.
 For cross-sectional variables:
 Histograms
 Box plots

 For time series variables:

 Time series graphs

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Histograms

 A histogram is the most common type of chart for

showing the distribution of a numerical variable.
 It is based on binning the variable—that is, dividing it
up into discrete categories.
 It is a column chart of the counts in the various
categories (with no gaps between the vertical bars).
 A histogram is great for showing the shape of a
distribution—whether the distribution is symmetric
or skewed in one direction.

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Example 2.3 (Continued):
Baseball Salaries [Link] (slide 1 of 2)

 Objective: To see the shape of the salary distribution

through a histogram.
 Solution: It is possible to create a histogram with Excel
tools only—but it is a tedious process.
 The resulting table of counts is usually called a frequency table.
 The counts are called frequencies.
 It is much easier to create a histogram with StatTools.
 First, designate a StatTools data set.
 Next, select Histogram from the Summary Graphs dropdown
list.
 In the dialog box, select the Salary variable and click OK.

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Example 2.3 (Continued):
Baseball Salaries [Link] (slide 2 of 2)

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Example 2.4:
Late or Lost [Link] (slide 1 of 2)

 Objective: To fine-tune a
histogram for a variable with
integer counts.
 Solution: Data set lists the number
of bags that were either late or lost
for 456 flights.
 In the Histogram dialog box,
request 9 bins and set the minimum
and maximum to -0.5 and 8.5.
 StatTools divides the range into 9
equal-length bins.
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Example 2.4:
Late or Lost [Link] (slide 2 of 2)

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Box Plots
 A box plot (or box-whisker plot) is an alternative
type of chart for showing the distribution of a
variable.
 The elements of a generic box plot are shown below:

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Example 2.3 (Continued):
Baseball Salaries [Link]

 Objective: To illustrate the features of a box plot,

particularly how it indicates skewness.
 Solution: In StatTools, select Box-Whisker Plot from
the Summary Graphs dropdown list and fill in the
dialog box.

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Time Series Data
 Our main interest in time series variables is how
they change over time, and this information is lost
in traditional summary measures and in histograms
or box plots.
 For time series data, a time series graph is used.
This is a graph of the values of one or more time
series, using time on the horizontal axis.
 This is always the place to start a time series analysis.

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Example 2.5:
Crime in [Link] (slide 1 of 3)

 Objective: To see how time series graphs help to detect trends in crime
data.
 Solution: Data set contains annual data on violent and property crimes for
the years 1960 to 2010.
 In StatTools, designate a StatTools data set.
 Then select Times Series Graph from the Time Series and Forecasting
dropdown list and fill in the resulting dialog box.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 2.5:
Crime in [Link] (slide 2 of 3)

Total Violent and Property Crimes

Population Totals

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Example 2.5:
Crime in [Link] (slide 3 of 3)

Violent and Property Crime Rates

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Example 2.6:
DJIA Monthly [Link] (slide 1 of 2)

 Objective: To find useful ways to summarize the monthly

Dow data.
 Solution: Data set contains monthly values of the Dow from
1950 through 2011.
 Create summary measures and time series graphs for
monthly values and percentage changes of the Dow.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 2.6:
DJIA Monthly [Link] (slide 2 of 2)

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Outliers
 An outlier is a value or an entire observation (row)
that lies well outside of the norm.
 Some statisticians define an outlier as any value more
than three standard deviations from the mean, but this
is only a rule of thumb.
 Even if values are not unusual by themselves, there
still might be unusual combinations of values.
 When dealing with outliers, it is best to run the
analyses two ways: with the outliers and without
them.
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Missing Values
 Most real data sets have gaps in the data.
 There are two issues: how to detect these missing values
and what to do about them.
 The more important issue is what to do about them:
 One option is to simply ignore them. Then you will have to
be aware of how the software deals with missing values.
 Another option is to fill in missing values with the average of
nonmissing values, but this isn’t usually a very good option.
 A third option is to examine the nonmissing values in the row
of a missing value; these values might provide clues on what
the missing value should be.

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Excel Tables for Filtering,
Sorting, and Summarizing

 Tables are a tool introduced in Excel 2007.

 You now have the ability to designate a rectangular
data set as a table and then employ a number of
powerful tools for analyzing tables.
 These tools include:
 Filtering
 Sorting
 Summarizing

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Example 2.7:
Catalog [Link] (slide 1 of 2)

 Objective: To illustrate Excel tables for analyzing the HyTex data.

 Solution: Data set contains data on 1000 customers of HyTex, a fictional
direct marketing company.
 Designate the data set as a table by selecting any cell in the data set and
clicking the Table button on the Insert ribbon.
 Use the dropdown arrows next to the variable names to filter in many
different ways.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 2.7:
Catalog [Link] (slide 2 of 2)

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Filtering
 Finding records that match particular criteria is called filtering.
 One way to filter is to create an Excel table, which
automatically provides dropdown arrows next to the field names
that allow you to filter.
 There are also three ways to filter on any rectangular data set
with variable names:
1. Use the Filter button from the Sort & Filter dropdown list on the
Home ribbon.
2. Use the Filter button from the Sort & Filter group on the Data
ribbon.
3. Right-click any cell in the data set and select Filter. You get several
options, the most popular of which is Filter by Selected Cell’s
Value.
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Example 2.7 (Continued):
Catalog [Link] (slide 1 of 2)

 Objective: To investigate the types of filters that can be

applied to the HyTex data.
 Solution: There is almost no limit to the filters you can
apply, but here are a few possibilities:
 Filter on one or more values in a field.
 Filter on more than one field.
 Filter on a continuous numerical field.
 Top 10 and Above/Below Average filters.
 Filter on a text field.
 Filter on a date field.
 Filter on color or icon.
 Use a custom filter.
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Example 2.7 (Continued):
Catalog [Link] (slide 2 of 2)

Results from a Typical Filter

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 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.

Chapter 3
DECISION MAKING
Finding Relationships among Variables
DATA ANALYSIS AND
BUSINESS ANALYTICS:
Introduction
 The primary interest in data analysis is usually in
relationships between variables.
 The most useful numerical summary measure is correlation.
 The most useful graph is a scatterplot.
 To break down a numerical variable by a categorical variable, it
is useful to create side-by-side box plots.
 Excel’s® pivot table breaks down one variable by others so that
all sorts of relationships can be uncovered very quickly.
 The diagram in the file Data Analysis [Link]
gives you the big picture of which analyses are appropriate
for which data types and which tools are best for
performing the various analyses.
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Relationships Among
Categorical Variables

 The most meaningful way to examine relationships

between two categorical variables is with counts and
corresponding charts of the counts.
 You can find counts of the categories of either variable
separately, as well as counts of the joint categories of
the two variables.
 Corresponding percentages of totals and charts help tell
the story.
 It is customary to display all such counts in a table
called a crosstabs (for crosstabulations). This is also
sometimes called a contingency table.
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Example 3.1:
Smoking [Link] (slide 1 of 2)

 Objective: To use a crosstabs

to explore the relationship
between smoking and drinking.
 Solution: Data set lists the
smoking and drinking habits of
8761 adults.
 Categories have been coded
“N,” “O,” “H,” “S,” and “D”
for “Non,” “Occasional,”
“Heavy,” “Smoker,” and
“Drinker.”
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Example 3.1:
Smoking [Link] (slide 2 of 2)

 To create the crosstabs,

enter the category headings
in Excel and use the
COUNTIFS function to fill
the table with counts of
joint categories.
 Next, sum across rows and
down columns to get totals.
 Then express the counts as
percentages of row and
percentages of column.
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Relationships Among Categorical Variables and a
Numerical Variable

 The comparison problem is one of the most

important problems in data analysis. It occurs
whenever you want to compare a numerical measure
across two or more subpopulations.
 Examples:
 The subpopulations are males and females, and the numerical
measure is salary.
 The subpopulations are different regions of the country, and
the numerical measure is the cost of living.
 The subpopulations are different days of the week, and the
numerical measure is the number of customers going to a
particular fast-food chain.
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Stacked and Unstacked Formats
 There are two possible data formats, stacked and
unstacked.
 The data are stacked if there are two “long” variables,
such as Gender and Salary. The idea is that the male
salaries are stacked in with the female salaries.
 This is the format you will see in the vast majority of situations.
 You will occasionally see data in unstacked format, when
there are two “short” variables, such as Male Salary and
Female Salary.
 StatTools is capable of dealing with either format and
can convert from stacked to unstacked or vice versa.
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Stacked and Unstacked Data
Stacked Data Unstacked Data

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Example 3.2:
Baseball Salaries 2011 [Link] (slide 1 of 2)
 Objective: To learn methods in StatTools for breaking down
baseball salaries by various categorical variables.
 Solution: Data set contains the same 2011 baseball data examined
previously, as well as several extra categorical variables.
 Create summary measures by selecting One-Variable Summary
from the Summary Statistics dropdown list.
 Next, click the Format button and choose Stacked. Then choose the
Cat variable you want to categorize by and the Val variable you
want to summarize.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.2:
Baseball Salaries 2011 [Link] (slide 2 of 2)
 Create side-by-side
boxplots, by selecting
Box-Whisker Plot
from the Summary
Graphs dropdown list
and filling in the
resulting dialog box.
 Select the Stacked
format so that you can
choose a Cat variable
and a Val variable.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Relationships Among Numerical
Variables
 To study relationships among numerical variables,
a new type of chart, called a scatterplot, and two
new summary measures, correlation and
covariance, are used.
 These measures can be applied to any variables that
are displayed numerically.
 However, they are appropriate only for truly
numerical variables, not for categorical variables
that have been coded numerically.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Scatterplots
 A scatterplot is a scatter of points, where each
point denotes the values of an observation for two
selected variables.
 It is a graphical method for detecting relationships
between two numerical variables.
 The two variables are often labeled generically as X
and Y, so a scatterplot is sometimes called an X-Y
chart.
 The purpose of a scatterplot is to make a relationship
(or the lack of it) apparent.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.3:
[Link] (slide 1 of 2)

 Objective: To use scatterplots to search for relationships in the golf

data.
 Solution: Data set includes an observation (stats) for each of the
top 200 earners on the PGA Tour.
 In StatTools, designate a StatTools data set for a particular year.
 Next, select Scatterplot from the Summary Graphs dropdown list
and then select at least one X variable and at least one Y variable.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.3:
[Link] (slide 2 of 2)

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Trend Lines in Scatterplots
 Once you have a scatterplot, Excel enables you to
superimpose one of several trend lines on the
scatterplot.
 A trend line is a line or curve that “fits” the scatter as
well as possible.
 This could be a straight line, or it could be one of
several types of curves.
 To do this, right-click on any point in the chart,
select Add Trendline, and fill out the resulting
dialog box.
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Scatterplot with Trend Line and Equation
Superimposed

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Correlation and Covariance
(slide 1 of 4)

 Correlation and covariance measure the strength and

direction of a linear relationship between two
numerical variables.
 The relationship is “strong” if the points in a scatterplot
cluster tightly around some straight line.
 If this straight line rises from left to right, the relationship is
positive and the measures will be positive numbers.
 If it falls from left to right, the relationship is negative and the
measures will be negative numbers.
 The two numerical variables must be “paired” variables.
 They must have the same number of observations, and the
values for any observation should be naturally paired.
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Correlation and Covariance
(slide 2 of 4)

 Covariance is essentially an average of products of

deviations from means.

 Excel has a built-in COVAR function, and StatTools

also calculates covariances automatically.
 Covariance has a serious limitation as a descriptive
measure because it is very sensitive to the units in
which X and Y are measured.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Correlation and Covariance
(slide 3 of 4)

 Correlation is a unitless quantity that is unaffected

by the measurement scale.

 The correlation is always between -1 and +1.

 The closer it is to either of these two extremes, the
closer the points in a scatterplot are to a straight line.
 Excel has a built-in CORREL function, and
StatTools also calculates correlations automatically.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Correlation and Covariance
(slide 4 of 4)

 Three important points about scatterplots,

correlations, and covariances:
 A correlation is a single-number summary of a
scatterplot. It never conveys as much information as
the full scatterplot.
 You are usually on the lookout for large correlations,
those near -1 or +1.
 Do not even try to interpret covariances numerically
except possibly to check whether they are positive or
negative. For interpretive purposes, concentrate on
correlations.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.3 (Continued)
[Link] (slide 1 of 2)

 Objective: To use correlations to understand

relationships in the golf data.
 Solution: In StatTools, create a table of correlations by
selecting Correlation and Covariance from the
Summary Statistics dropdown list.
 Fill in the resulting dialog box and check Correlations.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.3 (Continued)
[Link] (slide 2 of 2)

 You can learn more about a correlation by creating

the corresponding scatterplot.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Pivot Tables
 The pivot table is an Excel tool that allows you to
break data down by categories.
 Sometimes pivot tables are used to display tables of
counts, often called crosstabs or contingency
tables.
 However, crosstabs typically list only counts,
whereas pivot tables can list counts, sums,
averages, and other summary measures.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.4:
Elecmart [Link] (slide 1 of 2)

 Objective: To use pivot tables to break down the customer order

data by a number of categorical variables.
 Solution: Data set contains data on 400 customer orders during
several months for Elecmart company.
 Create a pivot table by clicking the PivotTable button on the
Insert ribbon.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.4:
Elecmart [Link] (slide 2 of 2)

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Hiding Categories (Filtering)
 You can filter out any items in a pivot table that you don’t want
to see.
 Click the Row Labels dropdown arrow of the active field and check
the items you want to filter on.
 A pivot table with hidden categories is shown below.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Sorting on Values or Categories
 It is easy to sort in a pivot table, either by the
numbers in the Values area or by the labels in a
Rows or Columns field.
 To sort by the numbers in the Values area, right-click
any number and select Sort.
 To sort on the labels of a Rows or Columns field, right-
click any of the categories and select Sort.
 You can also click the dropdown arrow for the field and get
the dialog box that allows both sorting and filtering.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Changing Locations of Fields (Pivoting)

 You can choose where to place variables in a pivot

table.
 For example, to place the Region variable in the
Columns area, drag the Region button from the Rows
area of the PivotTable Fields pane to the Columns area.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Changing Field Settings
 You can change various settings in the Field Settings dialog
box.
 To get to this dialog box:
 Click the Field Setting button on the Analyze/Options ribbon.
 OR right-click any of the pivot table cells and select the Field Settings item.

 The pivot table with Value Field Settings changed to Average is

shown below.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Pivot Charts
 It is easy to accompany pivot tables with pivot charts.
 These charts adapt automatically to the underlying pivot table.
 To create a pivot chart, click anywhere inside the pivot table,
select the PivotChart button on the Analyze/Options ribbon, and
select a chart type.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Multiple Variables in the Values Area

 More than a single variable can be placed in the

Values area.
 Also, a given variable in the Values area can be
summarized by more than one summarizing
function.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summarizing by Count
 The variable in the Values area can be summarized by
the Count function.
 This is useful when you want to know, for example, how
many of the orders were placed by females in the South.
 Right-click any number in the pivot table, select Value
Field Settings, and select the Count function.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Grouping
 Categories in a Rows or Columns variable can be grouped.
 Suppose you want to summarize Sum of Total Cost by
Date.
 Starting with a blank pivot table, check both Date and Total
Cost in the PivotTable Fields pane.
 Then right-click any date and select Group.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Other Pivot Table Features
 Showing/hiding subtotals and grand totals (check the Layout options on the
Design ribbon)
 Dealing with blank rows, that is, categories with no data (right-click any
number, choose PivotTable Options, and check the options on the Layout &
Format tab)
 Displaying the data behind a given number in a pivot table (double-click any
number in the Values area to get a new worksheet)
 Formatting a pivot table with various styles (check the style options on the
Design ribbon)
 Moving or renaming pivot tables (check the PivotTable and Action groups on
the Analyze/Options ribbon)
 Refreshing pivot tables as the underlying data changes (check the Refresh
dropdown list on the Analyze/Options ribbon)
 Creating pivot table formulas for calculated fields or calculated items (check
the Formulas dropdown list on the Analyze/Options ribbon)
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Example 3.5:
Lasagna [Link] (slide 1 of 2)

 Objective: To use pivot tables to explore which demographic

variables help to distinguish lasagna triers from nontriers.
 Solution: Data set contains data on over 800 potential
customers being tracked by a frozen lasagna company.
 Set up a pivot table that shows counts of triers and nontriers
for different categories of the variables.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Example 3.5:
Lasagna [Link] (slide 2 of 2)

Pivot Table and Pivot Chart for Examining the Effect of Gender

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Slicers and Timelines
 In Excel 2010, Microsoft added slicers—lists of
the distinct values of any variable, which you can
then filter on.
 You add a slicer from the Analyze/Options ribbon
under PivotTable Tools.
 In Excel 2013, a Timeline feature was added. A
Timeline is like a slicer, but it is specifically for
filtering on a date variable.

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Pivot Table with Slicers and a Timeline

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