STATISTICS FOR MANAGERS

LECTURE 1:
INTRODUCTION
BASICS
OBJECTIVES

INTRODUCTION

Statistical thinking
Logical reasoning
Data needed and proxies
How to get the data
Statistical tools

Numerology

INTRODUCTION
Good managers and directors get
impress by intelligent comments
(you can fool mediocre managers by
appealing to his/her ego!!!)
Grading in class: good comments
and group work is also rewarded. I
try to measure everything!!!

BASICS I
1900

200
180

1800

1700

140
120

Sales

1600

100
1500

80
60

1400

40
1300
20
1200

0
1999

2000

2001

2002

2003

2004

Advertising expenditure

160

Sales
Advertising exp.

BASIC PROBLEM I
Endogeneity
Circularity
Egg and chicken
Causality and correlation: two very
different concepts!!

BASIC PROBLEM I
Interpretation of any graph/table
implies many assumptions.
However, these assumptions are
almost never explicit.
Assumptions for the interpretation of
the previous graph?

Direction
Omission

BASICS II
1936 US presidential election
Sampling list: mail out ballot cards
to residential telephone subscribers
and owners of cars.
Result of the poll: Landon
(republican) will win with 57% of the
vote over Roosevelt (democract).

BASICS II
Outcome of the election: Roosevelt
won with 62.5% of the votes (523 of
the 531 electoral votes!!)
What happened? GROUP EXERCISE

BASICS PROBLEM II
Sample selection problem.
Training courses for employees.
GROUP WORK

BASICS PROBLEM II
Therapy of hormonal replacement
for women with menopause. Does it
work?
Possible problem.
Solution.
Why did the result with
observational data was wrong?
GROUP EXERCISE

SOLUTION if possible
Randomized experiment. Example.
In business this alternative is NEVER
AVAILABLE.
Look for other designs: clever
regression.

IMPORTANT!!
Statistical methods are never wrong!
It is their application by clumsy, unexperienced or careless researchers
that makes the results wrong.
Remember: if you get the design
/assumptions /data right the results
will always be right.

OBJECTIVES
Logical thinking using statistical
facts.
Proper interpretation of statistical
results
Posing hypothesis and checking their
likelihood.
Sources of data.