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Function of Statistics

Statistics is used for various purposes. It is used to simplify mass data and to make comparisons easier. It is also used to bring out trends and tendencies in the data as well as the hidden relations between variables. All this helps to make decision making much easier. Let us look at each function of Statistics in detail. 1. Statistics simplifies mass data The use of statistical concepts helps in simplification of complex data. Using statistical concepts, the managers can make decisions more easily. The statistical methods help in reducing the complexity of the data and consequently in the understanding of any huge mass of data. 2. Statistics makes comparison easier Without using statistical methods and cannot be done easily. Statistics helps sources. Grand totals, measures of graphs and diagrams, coefficient comparison. concepts, collection of data and comparison us to compare data collected from different central tendency, measures of dispersion, of correlation all provide ample scopes for

Hence, visual representation of numerical data helps you to compare the data with less effort and can make effective decisions. The graphical curve represented in figure 1.7 and figure 1.8 shows the profits of CBA Company and ZYX Company respectively, for ten years from 1998 to 2008. The profits are plotted on the Y-Axis and the timeline in years on X-Axis. From the graphs, we can compare the profits of two companies and derive to a conclusion that profits of CBA Company in the year 2008 are higher than that of ZYX Company. The graphical curve in case of figure 1.7 shows that the profits for CBA Company are increasing, whereas the profits curve in figure 1.8 is constant for ZYX Company from middle of the decade (1998-2008). 3. Statistics brings out trends and tendencies in the data After data is collected, it is easy to analyse the trend and tendencies in the data by using the various concepts of Statistics. 4. Statistics brings out the hidden relations between variables Statistical analysis helps in drawing inferences on data. Statistical analysis brings out the hidden relations between variables.

some people may be more willing to discuss a sensitive issue with a female interviewer than with a male one) cannot be used for non-audio information (graphics. depending on local call charge structure good for large national (or international) sampling frames some potential for interviewer bias (e. leading to higher response rates. cost is very low. fairly cost efficient. including: Telephone y y y y y y y y use of interviewers encourages sample persons to respond. Q. taste/smell samples) unreliable for consumer surveys in rural areas where telephone penetration is low[2] three types: o traditional telephone interviews o computer assisted telephone dialing o computer assisted telephone interviewing (CATI) Mail y y the questionnaire may be handed to the respondents or mailed to them. Decision making power becomes easier With the proper application of Statistics and statistical software packages on the collected data.5. demonstrations.g. since bulk postage is cheap in most countries .2 Methods of Statistical Survey There are several ways of administering a survey. but in all cases they are returned to the researcher via mail.[1] interviewers can increase comprehension of questions by answering respondents' questions. which can increase the profits in a business. managers can take effective decisions.

easy to manipulate by completing multiple times to skew results data creation. often several months.y y y y y y long time delays. DAP or other statistical analysis software data sets created in real time some are incentive based (such as Survey Vault or YouGov) may skew sample towards a younger demographic compared with CATI often difficult to determine/control selection probabilities. before the surveys are returned and statistical analysis can begin not suitable for issues that may require clarification respondents can answer at their own convenience (allowing them to break up long surveys. or demonstrations are involved often suitable for long surveys (but some respondents object to allowing strangers into their home for extended periods) .members of the panel have agreed to participate if not password-protected. manipulation and reporting can be automated and/or easily exported into a format which can be read by PSPP. in their homes (or at the front door) very high cost suitable when graphic representations. hindering quantitative analysis of data use in large scale industries. also useful if they need to check records to answer a question) no interviewer bias introduced large amount of information can be obtained: some mail surveys are as long as 50 pages response rates can be improved by using mail panels o members of the panel have agreed to participate o panels can be used in longitudinal designs where the same respondents are surveyed several Online surveys y y y y y y y y y y y y y can use web or e-mail web is preferred over e-mail because interactive HTML forms can be used often inexpensive to administer very fast results easy to modify response rates can be improved by using Online panels . Personal in-home survey y y y y respondents are interviewed in person. smells.

that is. and is read "the (conditional) probability of A. the probability of A. given B" or "the probability of A under the condition B".5 Conditional Probability Conditional probability is the probability of some event A. taken to a room and interviewed. it is the probability of both events together. improving response rates potential for interviewer bias Personal mall intercept survey y y y y y shoppers at malls are intercepted . The joint probability of A and B is written or Marginal probability is then the unconditional probability P(A) of the event A. and hence the probability of the occurrence of A is changed from the unconditional probability into the conditional probability given B.people feel that a mall is a more appropriate place to do research than their home potential for interviewer bias fast easy to manipulate by completing multiple times to skew results Q. That is. the marginal . Joint probability is the probability of two events in conjunction.they are either interviewed on the spot. given the occurrence of some other event B. When in a random experiment the event B is known to have occurred. If B can be thought of as the event of a random variable X having a given outcome. regardless of whether event B did or did not occur.y y y suitable for locations where telephone or mail are not developed skilled interviewers can persuade respondents to cooperate. or taken to a room and given a self-administered questionnaire socially acceptable . Conditional probability is written P(A|B). the possible outcomes of the experiment are reduced to B.

the probability of A given only initial information I. In these definitions. This is called marginalization. The prior probability of each event describes how likely the outcome is before the dice are rolled. B: Die 2 lands on 1. The updated conditional probability of A. P(A|I). Similarly P(B) = 1/6. not belonging to the probabilistic framework. 4 and 4. labelled die 1 and die 2. die 1 is equally likely to fall on each of its 6 sides. given I and the outcome of the event B. of the 6 × 6 = 36 possible ways that a pair of dice can land. This is the only one of the 36 outcomes where both A and C occur. Introduction Consider the simple scenario of rolling two fair six-sided dice. 5 and 3. just 5 result in a sum of 8 (namely 2 and 6. is known as the posterior probability. note that there need not be a causal or temporal relation between A and B. They may apply in some examples. Notice. For example.I). so P(C) = 5/36. In such conditioning. A may precede B or vice versa or they may happen at the same time. updating them to take account of (possibly new) information. P(A|B. however. and 6 and 2). 3 and 5.e. i. Some of these events can both occur at the same time. depending on the interpretation given to events. so its probability is 1/36. . if there are two possible outcomes for X with corresponding events B and B'. A may cause B or vice versa or they may have no causal relation at all. in the case where die 1 lands on 3 and die 2 lands on 5. may be achieved through Bayes' theorem. for example events A and C can happen at the same time. more generally) the joint probabilities over all outcomes for X. this means that . C: The dice sum to 8. Likewise.probability of A can be obtained by summing (or integrating. so P(A) = 1/6. For example. Define the following three events (not assumed to occur simultaneously): A: Die 1 lands on 3. Conditioning of probabilities. is known as the prior probability. without any knowledge of the roll's outcome. that causal and temporal relations are informal notions.

Now suppose we roll the dice and cover up die 2. ." Similarly. the dice cannot sum to 8. Intersection events and conditional events are related by the formula: In this example. if die 2 lands on 1. so we can only see die 1. which is read "the probability of C given A. P(C | B) = 0. This is called the conditional probability. we have: As noted above. and is written P(C | A). the probability that the dice sum to 8 is no longer 5/36. since die 2 must land on 5 to achieve this result. and observe die 1. this has no impact on the probability of event B. regardless of what the other die landed on. On the other hand. instead it is 1/6. .The probability of both A and C occurring is called the joint probability of A and C and is written . and observe that die 1 landed on 3. We say events A and B are statistically independent or just independent and in this case In other words. because it is the probability of C under the condition that A is observed. so . the probability of B occurring after observing that die 1 landed on 3 is the same as before we observed die 1. since if we observe die 2 landed on 1. so by this formula: On multiplying across by P(A). which only depends on die 2. if we roll the dice and cover up die 2. so . Given this partial information. we already know the dice can't sum to 8. On the other hand.

Definition Given a probability space ( . if two events are independent. of depends on their relationship as they approach zero. their joint probability is the product of the prior probabilities of each event occurring by itself. in which case If A has measure zero then the conditional probability is zero. as all yi approach zero. However it is possible to define a conditional probability with respect to a -algebra of such events (such as those arising from a continuous random variable). . For example. if B has positive measure. See conditional expectation for more information. P) and two events A. B probability of A given B is defined by F with P(B) > 0.In other words. The case where B has zero measure can only be dealt with directly in the case that B={y0}. An indication of why the more general case of zero measure cannot be dealt with in a similar way can be seen by noting that that the limit. the conditional If P(B) = 0 then P(A | B) is undefined (see Borel Kolmogorov paradox for an explanation). representing a single point. y) then. if X and Y are non-degenerate and jointly continuous random variables with density X. F.Y(x.

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