Chapter 1

Introduction

What is Statistics?
Statistics is a collection of methods for obtaining data, and then analyzing, interpreting and drawing
conclusions based on the data

Two areas of statistics:

1. Descriptive Statistics
a. Exposes the basic characteristics or summarizes the data
Frequency distribution table
Bar Graphs
Measures of central tendency
Measures of variation
2. Inferential Statistics
a. Group of statistical measurements or methods that functions or aims to infer or to make
interpretations
b. Makes concluding statement about the population based on the result from the sample
Inference of means
Analysis of variance (ANOVA)
Non- parametric test (i.e. Chi-square test)
Variable set of observable values or characteristics
Data values that the variables can assume

Classifications of data:
A. According to nature
1. Quantitative data data in the form of numbers
Age
Financial ratios
2. Qualitative data data in the form of categories, characteristics, etc.
Status
gender
B. According to source
1. Primary data original source/ first information
a. Direct method interview

b. Indirect method questionnaire

2. Secondary data information gathered from primary data
Information from business journal
Data from government or agencies
C. According to measurement
1. Discrete data data obtained through the process of counting
Number of respondents who agreed
2. Continuous data data obtained through the process of measuring
Minutes in studying
Inflation rates
Bank deposits
D. According to arrangement
1. Ungrouped data refers to raw data/ data without arrangement
2. Grouped data refers to arranged or tabulated data

Population and sample; Parameter and statistic

Population complete and entire collection of elements to be studied
Sample subset of population. Sometimes, a population is very large. To save time and money,
statisticians may study only a part of the population which is called sample.
Closely related to the concepts of population and sample are the concepts of parameter and statistic.
Parameter numerical measurement describing some characteristics of a population
Statistic numerical measurement describing some characteristics of a sample.

Levels of Data Measurement

Aside from being classified as qualitative or quantitative, variables can also be classified according to
how they are categorized, counted, or measured.
1. Nominal level
Lowest level of data measurement
Does not signify any quantitative value
Example:
Bank account number
Gender
Area codes
2. Ordinal level
Data arranged in order/ rank

Differences between the data values cannot be determined

Example:
Ranking in class
Managerial positions

3. Interval level
Has all properties of ordinal scale
Quantitative differences can be determined
Does not have true value of zero (i.e. meaningful differences in one degree between
each unit such as 80 and 81 degrees, but zero degree temperature does not mean there
is no heat)
Addition and subtraction of measurements can be performed
Example:
IQ test scores
Fahrenheit scales of temperature measurement
4. Ratio level
Highest level of measurement
There is absolute value of zero
Multiplication and division of data can be performed
Example:
Sales in ust canteen
Volume of gas in liters

Data Collection and Sampling Techniques

Sampling Technique process of selecting sample elements.
Note! : For detailed info about data collection and sampling techniques, refer to last chapter.
A. Probability Sampling
In this method, each member of the population has an equal chance of being selected in
the sample. It requires the complete list of the members of the population.
1. Random probability sampling where actual selection of sample elements requires
no particular order or system.
2. Non-random Probability sampling which samples are chosen without regard to
their probability of occurrence.
a. Systematic sampling using kth system
method involves selecting kth element of population where the first
sample is chosen at random, and the rest is obtained by selecting
every kth item.
b. Stratified Sampling Technique

method where population is divided into strata according to certain

predefined characteristics.
Sample are selected proportionate to the homogenous groups of
population.(for more info, refer to last chapter)
The homogeneity of groups aims to avoid the selection of sample
units coming from one group or category.

c. Cluster Sampling or Area Sampling Technique

Sample units are selected from an area or cluster where heterogeneity
among elements is already considered.
d. Multi stage sampling Technique
Complex form of cluster sampling
This is hard to explain, so the procedure on how to do so is written
below:
In a multistage random sample, a large area, such as a country, is first
divided into smaller regions (such as states), and a random sample of
these regions is collected. In the second stage, a random sample of
smaller areas (such as counties) is taken from within each of the
regions chosen in the first stage. Then, in the third stage, a random
sample of even smaller areas (such as neighbourhoods) is taken from
within each of the areas chosen in the second stage. If these areas are
sufficiently small for the purposes of the study, then the researcher
might stop at the third stage. If not, he or she may continue to sample
from the areas chosen in the third stage, etc., until appropriately small
areas have been chosen.
B. Non-probability Sampling
In this method, every member of the population do not have an equal chance of being
selected.
It does not require complete list of members of population
It is referred to as bias judgement sampling technique
1. Purposive Sampling selection of sample elements is based on criteria from the
objective of study.
2. Quota Sampling - certain number (limit) of sample elements is pre-determined
based on judgement of the researcher.
3. Convenience Sampling sample elements are selected in a process most
convenient to the researcher.

Summation Notation
The uppercase Greek letter (sigma) is used to denote the sum of all values.

is read as the summation of x sub i where i is from 1 to n. Which means the total of all variable X
starting from 1 until the last variable or n.
However, it is not always the case that it starts with 1 and ends with the last data.
Example:
1. Let

x1 = 8
X7 = 10

x2 = 9
x8 = 5

x3 = 12
x9 = 2

Evaluate:

Evaluate:

x4 = 15
x10 = 1

x5 = 6

x6 = 3

Heres another way to solve the problem:

Formulas of Summation:
Formula 1:

For any constant c,

Formula 2:

For any constant c,

Formula 3:

Note! Always remember that this is only applicable when with parenthesis

This is wrong : (X)

Formula 4:

Note! Always remember that this is only applicable when with parenthesis

This is wrong : (X)

Exercises
Classify each variable as discrete or continuous.
1.
2.
3.
4.
5.
6.

Loan
Electric consumption
Air temperature in a city yesterday
Size of a family
Dollar exchange rate
Capacity of water in a swimming pool

Indicate whether each of the following statements is a descriptive or inferential statistics

7. Based on the survey conducted by National Statistics Office, it is estimated that 24% of
unemployed people are women
8. Cigarettes were associated with 31% of the 4700 civilian fire deaths in 2000.
9. A recent study showed that eating garlic can lower blood pressure
Indicate which of the following examples refer to population or sample
10.
11.
12.
13.
14.

A group of 25 students selected to test a new teaching technique

The number of subscribers of telephone companies
The total machines produced by a factory in one week
The yearly expenditures on food for 10 families
The average number of hours in studying by 25 students

Classify each of the following as nominal, ordinal, interval, or ratio level data
15.
16.
17.
18.
19.
20.

The zip codes

The per capita income
The dollar exchange rate
The test scores in writing ability
The ranking of oil companies in the Philippines
The time required to produce iron bars in foundry plants

Classify each sample as random, stratified, systematic, or cluster

21.
22.
23.
24.

Supervisors are selected using random numbers in order to determine annual salaries
A head nurse selects 10 patients from each floor of a hospital.
Every 12th customer entering a shopping mall is asked to select his or her favourite store
In a university, all teachers from three buildings are interviewed to determine whether they
believe the students have higher grades now than in previous years.

Evaluate

Let x1 = 3, x2 = 1, x3=0, x4 = 2, and x5 = -2. Calculate the following.

( )

Answers to exercises:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.

Discrete
Continuous
Continuous
Discrete
Continuous
Continuous
Inferential
Descriptive
Inferential
Sample
Population
Population
Sample
Sample
Nominal
Ratio
Interval
Interval
Ordinal
Interval
Random
Cluster
Systematic
Stratified

26. 1.2
27. 16
28. 4