STATISTICS I

LECTURE 1
THIS COURSE

• Divided into two sections

• Descriptive Statistics
• Basic tools for Inferential Statistics

• The textbook
• Course Evaluation
• Attendance
TODAY’S LECTURE

• Introduction to statistics
• Types of statistics
• Types of variables
• The levels of measurement
INTRODUCTION TO STATISTICS

• Definition of statistics
• Importance of statistics in the modern world
• Importance of statistics in business studies
• How statistics can be dangerous?
DEFINITION

A Statistic (noun) is just a numerical fact,

communicating a very limited piece of
information that is not very useful by itself.

Example: According to a report by Forbes,

Bill Gates’ net worth was $86.0 billion in
2017.
DEFINITION

Statistics (verb) is the science of

collecting, organizing, presenting,
analyzing, and interpreting numerical
data to assist in making more effective
decisions.
DEFINITION

Example: According to a report by Forbes,

Bill Gates’ net worth was $86.0 billion in
2017, and he was the richest man in the
USA

The journey from different statistics to a

conclusion is called statistics
IMPORTANCE OF STATISTICS IN THE MODERN
WORLD
• Optimization requires analysis. Anything that can be measured can be
optimized.
• Google’s data handling
• Recommendations for videos on YouTube
• Analysis of DNA and plants
• Wind speeds for wind energy and sunlight for solar energy production

• Most importantly, the Messi and Ronaldo debate

WHO USES STATISTICS?

• Prediction • Insurance
• Doctors, engineers, artists…
• Financial Market
• Weather Forecast
• Business Statistics
• Emergency Preparedness
• Computer Science
• Political Campaigns
• Sports • Robotics

• Research • Aerospace

• Education • Data Science & Machine Learning

• Quality Testing
IMPORTANCE OF STATISTICS IN BUSINESS
STUDIES
• Accounting Audits
• Finance Investment recommendations
• Marketing Marketing research applications
• Production Quality control
• Economics Forecasting the future economic behavior
• Information Systems Monitoring data communication systems
WHY IS STATISTICS IMPORTANT TO YOU?

• Data are collected everywhere and require statistical knowledge to make the
information useful
• Statistical techniques are used to make professional and personal decisions. No
matter what your career, you will need a knowledge of statistics to understand
the world and to be conversant in your career.
•More effective personal and professional decisions
HOW STATISTICS CAN BE DANGEROUS?

• To explain this, we can say that media houses use wrong statistics to show their biased
opinions. They can justify their claims from the data. But that’s not the whole truth.

• For example: In 2007 in the UK, Colgate released an ad claiming, “80% of dentists
recommend Colgate.” However, the UK's advertising standard authority ordered them to
abandon this claim because although it was true, they knew people would not understand
its meaning.
• The actual data was something like this:
HOW STATISTICS CAN BE DANGEROUS?

Dentist 1 2 3 4 5
Recommendation Colgate Colgate Crest Colgate Colgate
Crest Crest Oral B Crest Crest
Oral B Sensodyne Oral B Oral B
Sensodyne Sensodyne
Pepsodent

• Yes, 80% recommend Colgate

• But 100% recommend Crest and 80% recommend Oral-B as well

• https://www.youtube.com/watch?v=sxYrzzy3cq8
TYPES OF STATISTICS

Descriptive Statistics - methods of organizing,

summarizing, and presenting data in an informative
way.

EXAMPLE: A Gallup poll found that 49% of the people in

a survey knew the name of the first book of the Bible.
The statistic 49 describes the number out of every 100
persons who knew the answer.
TYPES OF STATISTICS

EXAMPLE 2: According to Consumer Reports, General Electric

washing machine owners reported 9 problems per 100 machines
during 2001. The statistic 9 describes the number of problems
out of every 100 machines.

Inferential Statistics - A decision, estimate, prediction, or

generalization about a population, based on a sample.
TYPES OF STATISTICS

A population is a collection of all possible individuals, objects,

or measurements of interest.
A sample is a portion, or part, of the population of interest
EXAMPLES: DESCRIPTIVE VS INFERENTIAL
STATISTICS
EXAMPLE: A Gallup poll found that 49% of the people in a survey knew
the name of the first book of the Bible.
EXAMPLE: Based on a recent sample, I am 95% certain that the average
age of my customers is between 32 and 35 years

www.help.xlstat.com
EXAMPLES: DESCRIPTIVE VS INFERENTIAL
STATISTICS
• Consider two hospitals. Out of each hospital’s last 1000 patients, 900 survived at hospital
A, while 800 survived at hospital B.
• Which hospital is the better choice?

Low: High health Low health level High health level

Hospital/Patients Total survived
level survived survived
A 900 100:900 30 (30%) 96.6%
B 800 400:600 210 (52.5%) 98.3%