Statistics is an important field because it helps us understand the general trends and patterns in a given

data set. Statistics can be used for analyzing data and drawing conclusions from it. It can also be used
for making predictions about future events and behaviors.

There are two types of statistics. One type is called descriptive statistics, which focuses on summarising
data. Another type is called inferential statistics, which focuses on making conclusions about
populations based on samples.

Proprietary and
Confidential
1. Categorical Variables:
1. Nominal: Gender, Classes, Room Number,Vehicle etc
2. Ordinal : Rank Grade, Rating etc
2. Numeric Variables:
1. Continuous: Height, Weight, etc
2. Discrete: Counts, Marks (score), Number of people etc

Proprietary and
Confidential


Proprietary and
4
Confidential
 ▬

▬ ▬

Tossing an Unbiased
Die
0.20
Probability

0.10
0.00

1 2 3 4 5 6

Number appearing on die

Proprietary and
5
Confidential
▬

Proprietary and
6
Confidential
Proprietary and
Confidential


Proprietary and
8
Confidential
the types of absolute measures of dispersion are:
1. Range: It is simply the difference between the maximum value and the minimum value
2. Variance: Deduct the mean from each data in the set, square each of them and add each square and
finally divide them by the total no of values. Variance (σ2) = ∑(X−μ)2/N
3. Standard Deviation: The square root of the variance is known as the standard deviation i.e. S.D. = √σ.
4. Coefficient of Variance: The Standard deviation divided by mean

Proprietary and
Confidential
Proprietary and
Confidential



▬


▬

𝑥ҧ 𝛿 𝑜𝑟 𝑠. 𝑑.
𝜎 𝑜𝑟 𝑆. 𝐷.

Proprietary and
11
Confidential


Proprietary and
12
Confidential

▬


▬

Proprietary and
13 Confidential
Statistical inference is a method of making decisions about the parameters of a population,
based on random sampling. It helps to assess the relationship between the dependent and
independent variables. The purpose of statistical inference to estimate the uncertainty or
sample to sample variation.

Hypothesis testing, confidence intervals, regression analysis, analysis of variance

(ANOVA), and chi-square tests are examples of inferential statistics tools.

The components used for making statistical inference are:

• Sample Size
• Variability in the sample
• Size of the observed differences

Proprietary and
Confidential
Proprietary and
Confidential
The t-distribution, also known as the Student's t-distribution, is a type of probability distribution that is similar to the
normal distribution with its bell shape but has heavier tails. It is used for estimating population parameters for small
sample sizes or unknown variances.

Proprietary and
Confidential
Comparison Tests - T test
One Sample T
test 2 Sample T
Test Paired T
Test
ANOVA and
MANOVA

Relationship Test
Linear Regression
Logistic Regression
Corelations – Pearson, Kendall, Spearman, Point Biseral
Chi-Square test of independence
Proprietary and
Confidential
The procedure involved in inferential statistics are:
• Begin with a theory
• Create a research hypothesis
• Operationalize the variables
• Recognize the population to which the study results should apply
• Formulate a null hypothesis for this population
• Accumulate a sample from the population and continue the study
• Conduct statistical tests to see if the collected sample properties are adequately different from what
would be expected under the null hypothesis to be able to reject the null hypothesis

Proprietary and
Confidential
When we have a sample mean and its distribution. Trying to find out if the value of importance is
significant is any way

Types One tailed T test , 2 tailed t test

The Chips manufacturing want to fill a bag with 15g. In a sample they collected the mean is 14 with a
standard deviation of 0.2.
HYPOTHESIS TESTING – T-
STATISTIC
▬ 𝛽2
— 𝛽2 ≠

Coefficients Standard Error

Intercept -25096.83292 24859.61131
Price ($) -5055.269866 526.3995537
𝑏2 − 𝛽2
=
648.61 −500
= 0.711 𝑏2 Adexp ('000$) 648.6121403 209.0048787 𝑠𝑏2
𝑠𝑏 2 Promexp ('000$) 1802.610956 392.8485427
209

 𝛼
2
, residual df
 𝛼 ±2.086



𝖰𝟐

Proprietary and
21
Confidential
HYPOTHESIS TESTING – P-
VALUE

 𝛼
𝛼
 𝛼


𝑎

𝖰𝟐

Proprietary and
22
Confidential
When we have 2 sample with mean and std and have to
prove they are different

Example : A/B testing , Weight of boys and girls in a

school are different
 Paired T
•Test
Before vs after of a sample
• Types One tailed T test , 2 tailed t test
• Glucose level after a drug consumption
 ANOVA/
• Test difference of more than 2 groups
MANOVA
 Corelatio
•nPearsons - Relation between 2 continuous variables
• Spearman - Relation between 2 ordinal variables
Chi Square
Test
• If two categorical variable are related

Proprietary and Confidential 27