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
160

1700 140

Advertising expenditure
120
1600
Sales
Sales

100
Advertising exp.
1500
80

1400 60

40
1300
20

1200 0
1999 2000 2001 2002 2003 2004
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, un-
experienced 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.