The Where, Why, and How of Data Collection

The Where, Why,
and How of
Data Collection
IS 106 - FUNDAMENTALS OF COMPUTING
Objectives
1. Know the two areas of business statistics

2. Know the key data collection methods
3. Know key definitions:
• Population vs Sample • Primary Vs Secondary Data
• Qualitative vs Quantitative • Time Series vs Cross-sectional data
4. Understand the similarities and differences between sampling methods

5. Learn ow to categorize data by type and level of measurement
IS 106 – QUANTITATIVE METHODS

Data and Business
o Data is the lifeline of a business
o Every decision in a business is based on data

o
o
o
o But how do we make data useful?

Business Statistics
WHAT IS BUSINESS STATISTICS?

Business Statistics
o is a collection of procedures and techniques that are use to convert

data into meaningful information in a business environment.

Tools / Areas of
Statistics
1. DESCRIPTIVE STATISTICS
2. INFERENTIAL STATISTICS

Descriptive Statistics
o designed to describe data
o includes visual tools (charts and graphs)
o includes numerical measures (arithmetic mean)

Descriptive Statistics
o Describing data
1. Collect Data
2. Present / Visualize Data
3. Characterize Data
x i
Remember: The purpose of any descriptive measure is to describe data, your task will be to select the best to use.

Descriptive Statistics – Collect Data
Figure. Spreadsheet of a textbook company showing the data for their 15 books .

Descriptive Statistics – Present Data
Figure. Histogram showing the copies sold distribution

Descriptive Statistics – Present Data
Figure. Bar chart showing copies sold by Sales category

Descriptive Statistics – Characterize Data

Average = = ₱37,533.33
Figure. Getting the average advertising budget

Getting insights from millions of people

Inferential Statistics
o allow researchers to draw conclusions about a large body of data by

examining a smaller subset of the data
o Categories
• Estimation
• Hypothesis Testing

o Estimation
• Used if we want to learn about a large set of data but it is impractical to work
with all the data
• Estimates are formed from a subset of the data

o Hypothesis Testing
• Remember hearing:
 “more doctors recommend this”
 “consumers prefer McDo burger over burger king”
• Used to verify unconfirmed claims
• Like estimation, a portion of population is used to test various hypothesis

DRILL

DRILL
Consider this graph from a company annual

report. What type of graph is this?

DRILL
Figure. Bar chart showing copies sold by Sales category
Figure. Histogram showing the copies sold distribution

Procedures for
collecting data
1. D ATA S O U R C E S
2. P R O C E D U R E S F O R C O L L E C T I N G D ATA
3. D ATA C O L L E C T I O N I S S U E S

Data Collection
Before collecting data yourself
Check if there is already existing data

No Yes
No
Collect Check if accurate
Yes
Use data

Data Sources
o Primary Data
• Data captured from data collection
• experiments, telephone surveys, written questionnaires, direct observation, personal interviews
o Secondary Data
• Data captured from data compilation
• scan through printed documents

Procedures for
collecting data

Survey / Interview procedure
1. Define the Issue
2. Define the Population of Interest
3. Formulate survey questions
4. Pretest the survey / interview
5. Determine the sample size and sampling method
6. Select sample and administer interview/survey

1. Define the Issue

◦ State the purpose and objective
◦ tell them what you want to learn
◦ Make sure there is an agreement

2. Define the Population of Interest

◦ Identify your target group/population

3. Formulate the Questions

◦ Limit number of questions
◦ Ask important questions first
◦ Make questions clear and unambiguous

 Types of Questions
◦ Closed-ended questions
• answered by selecting from a limited number of options
◦ Open-ended questions
• answer by freely expressing your thoughts and ideas
◦ Demographic questions
• questions about your personal information

 Challenges in creating questions
◦ Leading Questions
• questions that can influence the respondents response
◦ Poorly worded questions

• questions that yields inconsistent responses
• e.g. “How much money do you make at your current job?”

• Many employees enjoy working overtime. What do you think about this?
• Usually, employees view bonuses as a valid form of motivation. How do
you feel about this?
• Many employees hate commuting to work every day. What are your
thoughts on this?

4. Pretest the Survey

◦ Test it with a small group from your target population
◦ Assess length, clarity, and ease

5. Determine the sample size and sampling method

◦ Sample size and sampling method is dependent on how confident and
precise you want your results
◦ More about this in the next topic . . . .

6. Select sample and administer the survey/interview

◦ Conduct Surveys
◦ Conduct Interviews
• Avoid leading questions

Data Collection Issues

1. Interviewer Bias
2. Nonresponse Bias
3. Selection Bias
4. Observer Bias
5. Measurement Error
6. Internal Validity
7. External Validity

1. Interviewer Bias
◦ Interviewers induce bias by:
• the way she ask, look, and tone of voice

2. Nonresponse Bias
◦ Affects the quality of data
◦ Instances like
• No email response
• Unanswered call
• Refusal to answer

3. Selection Bias
◦ Bias in the way respondents are selected

4. Observer Bias
◦ When data is collected thru observation
◦ People tend to view similar things differently

5. Measurement Error
◦ Instances where data is in the form of measurement
◦ Usually caused by misuse of measurement tools

6. Internal Validity
◦ A characteristic of an experiment in which data are collected in such a way
that external factors that could affect the experimental environment and test
subjects are eliminated/controlled.

7. External Validity
◦ A characteristic of an experiment whose results can be generalized beyond
the test environment so that outcomes can be replicated.

Populations, Samples,
and Sampling
Techniques
P O P U L AT I O N A N D S A M P L E
PA R A M E T E R A N D S TAT I S T I C S
S A M P L I N G C AT E G O R I E S

Population
o Set of all items or individuals of interest
o List of all objects or individuals in the population is called

Frame
o Each object or individual in the frame is known as a sampling
unit

Sample
o Subset of the population

Population and sample - example
o We want to know the current income of tricycle drivers after

banning them from our highways. Assume we have 1000 trike
drivers in Butuan City.
• Population = 1000 tricycle drivers
• Frame = List of names of the drivers
• Sample = 300 tricycle drivers

Census
o Examining the entire population

Census vs Sample
o Trade offs to consider!

• Is the information that will be gathered from a census woth the extra cost?
• Is a census practical / possible?
• Measurement error in census data is greater

Parameters and
Statistics

Parameters
o Descriptive numerical measures that are computed from an entire

population
o Numerical measures from census data

Statistics
o Descriptive numerical measures that are computed from a

sample of the population
o Numerical measures from sampling.

Parameters VS Statistics
o Example:
• Population = 1000 tricycle drivers
• Sample = 300 tricycle drivers
o If we get the average income of all 1000 drivers, the result is called a _________.
o If we get the average income of just the 300 drivers, the result is called a
_________.

Why Sample?
o Less time consuming
o Less costly to administer
o Statistical results that are of high precision and accuracy can be

obtained from samples.

Sampling
NON-STATISTICAL SAMPLING
STATISTICAL SAMPLING

Non-statistical Sampling
o Methods of selecting samples using convenience, judgement, or

other non-chance processes
o Objects or individuals in the population has no equal chance of
being sampled.

Non-statistical Sampling - example
During harvest, pickers load lugs with 20 pounds of cherries which

are then transported to the packing plant. At the packing plant, the
cherries are to be graded and shipped.
Challenge:
◦ Volume of cherries

Non-statistical Sampling - example
Solution:
◦ Convenience sampling
• Quality checker picks a sample from the lugs
• Grade the sample and assign overall quality to the lug
• Assuming the cherry on top is the same quality with the others.

Statistical Sampling
o Probability sampling
o Methods of sampling that used selection techniques based on

calculable chance selection

Statistical Sampling
o Types
• Simple Random Sampling
• Stratified Sampling
• Cluster Sampling
• Systematic Sampling

Simple random sampling
• A method of sampling such that every item from the population has equal
chance of being selected
• Samples can be obtained from a table of random numbers or computer
random number generators
• Selection may be with or without replacement

Simple random sampling - example
We want to know what percentage of riders in the motorcycle

club comes late during weekend rides. For this example, we
simplify the situation by saying that there are only 5 riders in the
club: Jundee, Rodny, Clark, El, and Godwin. We will sample 3
people only.

Simple random sampling - example

o Population > Let n = 5
Jundee, Clark, Clark
Jundee, Clark, El
o Sample > Let r = 3 Jundee, Clark, Rodny
Jundee, Godwin, El
Jundee, Godwin, Rodny
o C (n, r) = Jundee, El, Rodny
Clark, Godwin, El
Clark, Godwin, Rodny
Clark, El, Rodny
Godwin, El, Rodny

Simple random sampling
o Selection without replacement

• If no item is selected more than once in a given sample
o Selection with replacement

• If an item is selected more than once in a given sample

Stratified Random Sampling
• Population is divided into subgroups called strata.

 based on common characteristics
• Samples are selected from each stratum using simple random

sampling method.
• Samples from each stratum are then combined.

Stratified Sampling- example
We are tasked to estimate the total cash holdings of the business in the
Philippines.
Challenge:
• Institutions vary in size
•Mostly are small, some are medium, and only few are large

Stratified Sampling- example
Solution:
• Stratified sampling
 Group the businesses according to size
 Select a random sample of businesses from each group / stratum
 Combine result
 Optional: Stratify each group

Systematic Random Sampling
• Involves selecting every kth item in the population after a

randomly selected starting point between 1 and k.
• k is the ratio of the population size over the desired sample
size

• How?
1. Decide on the sample size
2. Get the ratio of the population size over the desired sample size
3. Generate a random number between 1 to k
4. Select the kth object after that until the desired sample size is
obtained.

Systematic Random Sampling- example
An organization wants to establish a code of ethics. To determine the

opinion of its 20,000 members, a questionnaire will be sent to a
sample of 500 members. Although a simple random sampling could
have been used, an alternative method called systematic random
sampling was chosen.

Systematic Random Sampling- example
oSolution:
o Decide on the sample size: n = 500
o Get the ratio of the population over the sample: k=20,000/500 = 40
o Generate a random number from 1 to k = 35
o Select the kth after that until we reach 500
o Sample Results: 35, 75, 105, …

• When to use?
• Use it as an alternative to simple random sampling only when you can
assume the population is randomly ordered with respect to the measurement
being addressed in the survey.
• In this case, peoples’ views on ethics are likely unrelated to the spelling of
their last name.

Cluster Sampling
• Involves dividing the population into cluster, that are intended to be mini-
populations
• A simple random sample of m clusters are then selected from the group of
clusters.
• If m clusters have been selected,
• All the items in the cluster can be used as sample; or
• Items can be chosen from each cluster using any probability technique

Cluster Sampling
• How?
1. Divide the population to clusters.
2. Select m clusters from the clusters using simple random sampling

( Primary Clusters).
3. You have two options:
a) Use all the items in each of the m clusters; or
b) Use any sampling technique to select items from each of the m clusters
Cluster Sampling- example
The Oakland Raiders of the National Football League plays its home
games at McAfee Coliseum in Oakland, California. Recently an outside
marketing group was retained by the Raiders to interview season
ticket holders about the potential for changing how season ticket
pricing is structured. The marketing firm plans to interview season
ticket holders just prior to home games during the current season.

McAfee Coliseum

o Challenge
• The geographical spread of the sample.
o Solution:
• Cluster Sampling

o Solution:
1. m clusters = stadium sections
2. Sample Clusters = Simple random from the m clusters

◦ Assume the survey firm randomly selects eight clusters
◦ 104 – 142 – 147 – 218 – 228 – 235 – 307 – 327
3. Use all items from each cluster or select a random sample from each.

Data Types and
Measurement
DATA TYPES
DATA MEASUREMENT LEVELS

Data Types and Measurement
o The data that the statistical techniques deal with are of different types of
level of measurements
o In general, there are 4 data types:

 qualitative and quantitative, and times series and cross-sectional data
o and 4 data measurement levels:

 Nominal, ordinal, interval and ratio

Data type
1. Qualitative
 result of categorizing or describing attributes of a population
• Data is inherently categorical
 generally described by words or letters

Data type
1. Qualitative - Example
 Hair Color
• Black, Dark brown, light
 Blood Type
• AB+, O-, B+

Data type
2. Quantitative
 result of counting or measuring attributes of a population
• data is inherently numerical
 always numbers
• sometimes data are best expressed in purely numbers
 e.g. amount of money, weight, number of people

Data type
2. Quantitative
a) Discrete
◦ result of counting (counted items )
b) Continuous
◦ result of measuring ( measured characterics)

Data type
2. Quantitative - Example
◦ Assume you and your friends carry backpacks with books in them to
school.
◦ Discrete data is ……..
◦ Continuous data is ……

Data type
3. Cross-sectional
 A set of data values observed at a fixed point in time
4. Time-Series
 A set of data values observe over time

Data type
Cross-sectional and Time-Series Example
Sales (in $1000’s)

2003 2004 2005 2006
Atlanta 435 460 475 490
Boston 320 345 375 395
Cleveland 405 390 410 395
Denver 260 270 285 280

Data Measurement Levels
o Higher the level of measurements, the more sophisticated the analysis that can
be done

1. Nominal
 Lowest form of data but the most common
 Assigning codes to categories generates nominal data
• words, letters, and numbers are used to classify data
• categorical / qualitative
 Nominal scale data are not ordered
 No mathematical computations can be done (Why is that?)

1. Nominal - Example
 F - Female, M – Male
 1 – Residential, 2 – Commercial, 3 – Industrial, 4 – Government
 S = Single, D = Divorced, M = Married, O = Other,

2. Ordinal
 Ordinal or rank data
 Data elements can be rank-ordered on the basis of some relationship among them
with the assigned values indicating the order
 Ordinal measurement allows decision makers to equate or rank-order two or more

observations
 Cannot be used for calculations

2. Ordinal - Example
 Competition Placement
o 1st - Rodny, 2nd - Godwin, 3rd – Clark, 4th - Jundee
 Level of Satisfaction
o 1 – Very Satisfied, 2 – Satisfied, 3 – Fair, 4 – Not Satisfied

3. Interval
 Not only classifies and orders the measurements but also specifies the distance
between each interval from low to high interval
 The interval data allows us to precisely measure the difference between any
two values
 In ordinal data, we only know that the value is larger than the other

3. Interval
 Can be calculated but cannot be compared
 The interval between items are equal
 No true zero
 The zero entry represents a position on a scale, but the entry is not really
zero

3. Interval - Example
 A popular example of this level of measurement is temperature in centigrade,
where, for example, the distance between 94°C and 96°C is the same as the
distance between 100°C and 102°C.

4. Ratio
 Data that have all the characteristics of interval data but have a true zero
 Zero means zero in the scale, you won’t have a negative value in the
scale
 The ratio between two points has meaning
 Ratios can be calculated

4. Ratio - Example
 Student Score Rati
 0 20 80
 Ratio between 80 and 20
 Means that the student who scored 80 is 4 times better than the student
who scores lower

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The Where, Why,

1. Know the two areas of business statistics

4. Understand the similarities and differences between sampling methods

IS 106 – QUANTITATIVE METHODS

o Data is the lifeline of a business

o Every decision in a business is based on data

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

o is a collection of procedures and techniques that are use to convert

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

o designed to describe data

o includes visual tools (charts and graphs)

o includes numerical measures (arithmetic mean)

IS 106 – QUANTITATIVE METHODS

2. Present / Visualize Data

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

Figure. Histogram showing the copies sold distribution

IS 106 – QUANTITATIVE METHODS

Figure. Bar chart showing copies sold by Sales category

IS 106 – QUANTITATIVE METHODS

Figure. Getting the average advertising budget

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

o allow researchers to draw conclusions about a large body of data by

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

 “consumers prefer McDo burger over burger king”

• Used to verify unconfirmed claims

• Like estimation, a portion of population is used to test various hypothesis

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

Consider this graph from a company annual

IS 106 – QUANTITATIVE METHODS

Figure. Bar chart showing copies sold by Sales category

Figure. Histogram showing the copies sold distribution

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

Check if there is already existing data

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

1. Define the Issue

2. Define the Population of Interest

3. Formulate survey questions

4. Pretest the survey / interview

5. Determine the sample size and sampling method

6. Select sample and administer interview/survey

IS 106 – QUANTITATIVE METHODS

1. Define the Issue

◦ Make sure there is an agreement

IS 106 – QUANTITATIVE METHODS

2. Define the Population of Interest

IS 106 – QUANTITATIVE METHODS

3. Formulate the Questions

◦ Ask important questions first

◦ Make questions clear and unambiguous

IS 106 – QUANTITATIVE METHODS

IS 106 – QUANTITATIVE METHODS

◦ Poorly worded questions

• e.g. “How much money do you make at your current job?”

IS 106 – QUANTITATIVE METHODS