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Chapter 3
A PowerPoint Presentation Package to Accompany
Describing Data Visually
Chapter Contents
Applied Statistics in Business & 3.1 Stem-and-Leaf Displays and Dot Plots
Economics, 4th edition 3.2 Frequency Distributions and Histograms
3.3 Excel Charts
3.4 Line Charts
David P. Doane and Lori E. Seward
3.5 Bar Charts
3.6 Pie Charts
Prepared by Lloyd R. Jaisingh 3.7 Scatter Plots
3.8 Tables
3.9 Deceptive Graphs

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. 3-2

Chapter 3

Chapter 3
Describing Data Visually Describing Data Visually
Chapter Learning Objectives Chapter Learning Objectives

LO3-1: Make a stem-and-leaf or dot plot by hand or by computer. LO3-6: Know the rules for effective bar charts and pie charts.
LO3-2: Create a frequency distribution for a data set. LO3-7: Make and interpret a scatter plot using Excel.
LO3-3: Make a histogram with appropriate bins. LO3-8: Make simple tables and pivot tables.
LO3-4: Identify skewness, modal classes, and outliers in a histogram. LO3-9: Recognize deceptive graphing techniques.
LO3-5: Make an effective line chart using Excel.

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3.1 Stem-and-Leaf Displays and 3.1 Stem-and-Leaf Displays and

Dot Plots Dot Plots
•  Begin with univariate data (a set of n observations on one variable)
•  Methods of organizing, exploring and summarizing data include: and consider the following:

- Visual (charts and graphs)

provides insight into characteristics of a data set without using
mathematics.

- Numerical (statistics or tables)

provides insight into characteristics of a data set using
mathematics.

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Chapter 3
3.1 Stem-and-Leaf Displays and LO3-1 3.1 Stem-and-leaf Displays and
Dot Plots Dot Plots
•  Measurement
The type of graph you use to display your data is dependent on the
•  Look at the data and visualize how they were collected and type of data you have. Some charts are better suited for quantitative
measured. data, while others are better for displaying categorical data.

•  Sorting (Example: Price/Earnings Ratios) LO3-1: Make a stem-and-leaf or dot plot by hand or by computer.
•  Sort the data and then summarize in a graphical display. Here are Stem-and-Leaf Plot
the sorted P/E ratios (values from Table 3.2).
One simple way to visualize small data sets is a stem-and-leaf plot.
The stem-and-leaf plot is a tool of exploratory data analysis (EDA)
that seeks to reveal essential data features in an intuitive way. A stem-
and-leaf plot is basically a frequency tally, except that we use digits
instead of tally marks. For two-digit or three-digit integer data, the stem
is the tens digit of the data, and the leaf is the ones digit.

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Chapter 3
LO3-1 3.1 Stem-and-Leaf Displays LO3-1 3.1 Stem-and-Leaf Displays and
and Dot Plots Dot Plots
For the 44 P/E ratios, the stem-and-leaf plot is given below. Dot Plots
•  A dot plot is the simplest graphical display of n individual values of numerical
data.
- Easy to understand.
- It reveals dispersion, central tendency, and the shape of the distribution.
•  Steps in Making a Dot Plot
1. Make a scale that covers the data range.

2. Mark the axes and label them.

3. Plot each data value as a dot above the scale at its approximate location.
For example, the data values in the fourth stem are 31, 37, 37, 38. We always use equally
spaced stems (even if some stems are empty). The stem-and-leaf can reveal central tendency
(24 of the 44 P/E ratios were in the 10–19 stem) as well as dispersion (the range is from 7 to 59). Note: If more than one data value lies at about the same axis location,
In this illustration, the leaf digits have been sorted, although this is not necessary. The stem-and-
leaf has the advantage that we can retrieve the raw data by concatenating a stem digit with each
the dots are stacked vertically.
of its leaf digits. For example, the last stem has data values 50 and 59.
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Chapter 3

LO3-1 3.1 Stem-and-Leaf Displays and LO3-1 3.1 Stem-and-Leaf Displays and
Dot Plots Dot Plots
Comparing Groups
•  A stacked dot plot compares two or more groups using a common
X-axis scale.

•  The range is from 7 to 59.

• All but a few data values lie between 10 and 25.
• A typical middle data value would be around 17 or 18.
• The data are not symmetric due to a few large P/E ratios.

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Chapter 3
3.2 Frequency Distributions and 3.2 Frequency Distributions and
LO3-2 Histograms LO3-2 Histograms
LO3-2: Create a frequency distribution for a data set. Constructing a Frequency Distribution
- Herbert Sturges proposed the following rule:
Bins and Bin Limits

•  A frequency distribution is a table formed by classifying n data

values into k classes (bins).
•  Bin limits define the values to be included in each bin. Widths must
all be the same except when we have open-ended bins.
•  Frequencies are the number of observations within each bin.

•  Express as relative frequencies (frequency divided by the total) or

percentages (relative frequency times 100).

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Chapter 3
3.2 Frequency Distributions and 3.2 Frequency Distributions and
LO3-2 Histograms LO3-2 Histograms

Histograms

•  A histogram is a graphical representation of a frequency distribution.

Y-axis shows frequency within each bin.

•  A histogram is a bar chart.

X-axis ticks shows end points of each bin.

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Chapter 3

3.2 Frequency Distributions and 3.2 Frequency Distributions and

LO3-3 Histograms LO3-3 Histograms
LO3-3: Make a histogram with appropriate bins.
LO3-3: Make a histogram with appropriate bins.
•  Consider 3 histograms for the P/E ratio data with different bin
widths. What do they tell you? •  Choosing the number of bins and bin limits in creating histograms
requires judgment.

•  One can use software programs to create histograms with different

bins. These include software such as:
•  Excel
•  MegaStat
•  Minitab

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Chapter 3
3.2 Frequency Distributions and 3.2 Frequency Distributions and
LO3-3 Histograms LO3-4 Histograms
Modal Class LO3-4: Identify skewness, modes, and outliers in a histogram.
•  A histogram bar that is higher than those on either side. Shape
•  A histogram may suggest the shape of the population.
•  Unimodal – a single modal class. •  It is influenced by the number of bins and bin limits.

•  Bimodal – two modal classes. •  Skewness – indicated by the direction of the longer tail of the
histogram.
•  Multimodal – more than two modal classes. Left-skewed – (negatively skewed) a longer left tail.

•  Modal classes may be artifacts of the way bin limits are chosen. Right-skewed – (positively skewed) a longer right tail.

Symmetric – both tail areas are the same.

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Chapter 3
3.2 Frequency Distributions and 3.2 Frequency Distributions and
LO3-4 Histograms Histograms
Frequency Polygons and Ogives
•  A frequency polygon is a line graph that connects the midpoints of
the histogram intervals, plus extra intervals at the beginning and end
so that the line will touch the X-axis.
•  It serves the same purpose as a histogram, but is attractive when you
need to compare two data sets (since more than one frequency
polygon can be plotted on the same scale).
•  An ogive (pronounced oh-jive ) is a line graph of the cumulative
frequencies.
•  It is useful for finding percentiles or in comparing the shape of the
sample with a known benchmark such as the normal distribution (that
you will be seeing in the next chapter).

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Chapter 3

3.2 Frequency Distributions and 3.3 Excel Charts

Histograms

Frequency Polygons and Ogives This section describes how to use Excel to create
charts. Please refer to the text.

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Chapter 3

Chapter 3
LO3-5 3.4 Line Charts LO3-5 3.4 Line Charts
LO3-5: Make an effective line chart using Excel. Simple Line Charts
•  Two-scale line chart – used to compare variables that differ in
Simple Line Charts magnitude or are measured in different units.
•  Used to display a time
series or spot trends,
or to compare time
periods.

•  Can display several

variables at once.

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Chapter 3
LO3-5 3.4 Line Charts LO3-5 3.4 Line Charts
Log Scales Log Scales
•  Arithmetic scale – distances on the Y-axis are proportional to the A log scale is useful for time series data that might be expected to grow at a
compound annual percentage rate (e.g., GDP, the national debt, or your
magnitude of the variable being displayed.
future income). It reveals whether the quantity is growing at an
increasing percent (concave upward),
•  Logarithmic scale – (ratio scale) equal distances represent equal constant percent (straight line), or
ratios. declining percent (concave downward)

•  Use a log scale for the vertical axis when data vary over a wide
range, say, by more than an order of magnitude.

•  This will reveal more detail for smaller data values.

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Chapter 3

LO3-6 3.5 Bar Charts LO3-6 3.5 Bar Charts

LO3-6: Know the rules for effective bar charts and pie charts. Pareto Charts

Simple Bar Charts •  Special type of bar chart used in quality management to display the
frequency of defects or errors of different types.
•  Most common way to display attribute data.
- Bars represent categories or attributes. •  Categories are
- Lengths of bars represent frequencies. displayed in
descending order
of frequency.

•  Focus on
significant few
(i.e., few
categories that
account for most defects or errors).
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Chapter 3
LO3-6 3.5 Bar Charts LO3-6 3.6 Pie Charts
Stacked Bar Chart LO3-6: Know the rules for effective bar charts and pie charts.

An Oft-Abused Chart
•  Bar height is the sum
of several subtotals. •  A pie chart can only convey a general idea of the data.
Areas may be •  Pie charts should be used to portray data which sum to a total
compared by color to (e.g., percent market shares).
show patterns in the •  A pie chart should only have a few (i.e., 2 or 3) slices.
subgroups and total. •  Each slice can be labeled with data values or percents.

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Chapter 3
LO3-6 3.6 Pie Charts LO3-6 3.6 Pie Charts
An Oft-Abused Chart Pie Chart Options
•  Consider the following charts used to illustrate an article from the Wall Street •  Exploded and 3-D pie charts add strong visual impact.
Journal. Which type appears to be better?

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Chapter 3

LO3-7 3.7 Scatter Plots 3.8 Tables

LO3-7: Make and interpret a scatter plot using Excel. •  Tables are the simplest form of data display.

•  Scatter plots can convey patterns in data pairs that would not be •  A compound table is a table that contains time series data down the
apparent from a table. columns and variables across the rows.

Example: School Expenditures

Refer to
the text for •  Arrangement of data is in rows and columns to enhance meaning.
EXCEL
outputs. •  The data can be viewed by focusing on the time pattern (down the
columns) or by comparing the variables (across the rows).

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Chapter 3
3.8 Tables LO3-8
3.8 Tables
Example: School Expenditures LO3-8: Make simple tables and Pivot tables
Here are some tips for creating effective tables:
1. Keep the table simple, consistent with its purpose. Put
summary tables in the main body of the written report and
detailed tables in an appendix.
2. Display the data to be compared in columns rather than rows.
3. For presentation purposes, round off to three or four significant
digits.
4. Physical table layout should guide the eye toward the
comparison you wish to emphasize.
•  Units of measure are stated in the footnote. 5. Row and column headings should be simple yet descriptive.
•  Note merged headings to group columns. 6. Within a column, use a consistent number of decimal digits.
•  See text for Tips for Effective Bar and Column
Charts. Tables .
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Chapter 3
LO3-9 3.9 Deceptive Graphs LO3-9 3.9 Deceptive Graphs
LO3-9: Recognize deceptive graphing techniques. Error 2: Elastic Graph Proportions

Error 1: Nonzero Origin •  Keep the aspect ratio (width/height) below 2.00 so as not to
exaggerate the graph. By default, Excel uses an aspect ratio of
•  A nonzero origin will exaggerate the trend.
1.68.

Deceptive Correct
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Chapter 3

Chapter 3

LO3-9 3.9 Deceptive Graphs LO3-9 3.9 Deceptive Graphs

Error 4: 3-D and Novelty Graphs Error 5: 3-D and Rotated Graphs

•  Can make trends appear to dwindle into the distance or loom •  Can make trends appear to dwindle into the distance or loom
towards you. towards you.

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Chapter 3
LO3-9 3.9 Deceptive Graphs LO3-9 3.9 Deceptive Graphs
Error 8: Complex Graphs
Error 11: Area Trick
•  Avoid if possible. Keep your main objective in mind. Break graph
into smaller parts. •  As figure height increases, so does width, distorting the graph.

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LO3-9 3.9 Deceptive Graphs

•  Other deceptive graphing techniques.

•  Error 3: Dramatic Title and Distracting Pictures

•  Error 6: Unclear Definitions or Scales
•  Error 7: Vague Sources
•  Error 9: Gratuitous Effects
•  Error 10: Estimated Data

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