Introduction to statistics

Statistics is the body of procedures and techniques used to collect, present, and analyze data on
which to base decisions in the face of uncertainty or incomplete information. Statistical analysis is
used today in practically every profession. The economists use it to test the efficiency of alternative
production techniques; the businessperson may use it to test the product design or package that
maximizes sales; the sociologist to analyze the result of a drug rehabilitation program; the industrial
psychologist to examine workers' responses to plant environment; the political scientist to forecast
voting patterns; the physician to test the effectiveness of a new drug; the chemist to produce cheaper
fertilizers; and so on.
Most of the statistical information in newspapers, magazines, company reports, and other
publications consists of data that are summarized and presented in a form that is easy for the reader
to understand. Such summaries of data, which may be tabular, graphical, or numerical, are referred
to as descriptive statistics. Descriptive statistics summarize a body of data with one or two pieces of
information that characterize the whole data. It also refers to the presentation of a body of data in
the form of tables, charts, graphs, and other forms of graphic display.
Inferential statistics (both estimation and hypothesis testing) refers to the drawing of generalizations
about the properties of the whole (called a population) from the specific or a sample drawn from the
population. Inferential statistics thus involves inductive reasoning. (This is to be contrasted with
deductive reasoning, which ascribes properties to the specific starting with the whole.)
Statistics started as a purely descriptive science, but it grew into a powerful tool of decision making
in business and economics, as its inferential branch was developed. Modern statistical analysis
refers primarily to inferential or inductive statistics. However, deductive and inductive statistics are
complementary. It is necessary how to generate samples from populations before we can learn to
generalize from samples to populations.
In order for statistical inference to be valid, it must be based on a sample that fully reflects the
characteristics and properties of the population from which it is drawn. A representative sample is
ensured by random sampling, whereby each element of the population has an equal chance of being
included in the sample
The distinction between a population together with its parameters and a sample together with its
statistics is a fundamental concept in inferential statistics. Information in a sample is used to make
inferences about the population from which the sample was drawn.
Source: Anderson et al. (2010)
Answer the next questions. Only answers in English will be allowed.
1. Define by your own words a new and own definition of statistics
2. What is the main characteristic of Descriptive statistics?
3. What is the main importance of inferential statistics in business and economics?
4. Is it possible to say that descriptive and inferential statistics may complement each other?
Justify your answer
5. What is the main importance of sampling in statistical inference?

Frequency Distribution
A frequency distribution is a tabular summary of data showing the number (frequency) of items in
each of several nonoverlapping classes. This definition holds for quantitative as well as qualitative
data. However, with quantitative data we must be more careful in defining the nonoverlapping
classes to be used in the frequency distribution.
The five steps necessary to define the classes for a frequency distribution with quantitative data are:
1. Determine the number of nonoverlapping classes.
Classes are formed by specifying ranges that will be used to group the data. As a general guideline,
it is recommendable to use between 5 and 20 classes. For a small number of data items, as few as
five or six classes may be used to summarize the data. For a larger number of data items, a larger
number of classes is usually required. The goal is to use enough classes to show the variation in the
data, but not so many classes that some contain only a few data items
2. Determine the width of each class.
The second step in constructing a frequency distribution for quantitative data is to choose a width
for the classes. As a general guideline, is it recommendable that the width be the same for each
class. Thus the choices of the number of classes and the width of classes are not independent
decisions. A larger number of classes means a smaller class width, and vice versa. To determine an
approximate class width, we begin by identifying the largest and smallest data values. Then, with
the desired number of classes specified, we can use the following expression to determine the
approximate class width.
3. Determine the class limits.
Class limits must be chosen so that each data item belongs to one and only one class. The lower
class limit identifies the smallest possible data value assigned to the class. The upper class limit
identifies the largest possible data value assigned to the class. In developing frequency distributions
for qualitative data, we did not need to specify class limits because each data item naturally fell into
a separate class. But with quantitative data, class limits are necessary to determine where each data
value belongs.
4. Determine the midpoint class
The center of each class is called the midpoint (or class mark). The midpoint is often used as a
representative value of the entire class. To determine the midpoint class, add the lower and upper
limits of one class and divide by 2.
5. Count the relative frequency, cumulative frequency and percent frequency distributions
The relative frequency and percent frequency distributions for quantitative data is defined in the
same manner as for qualitative data. First, recall that the relative frequency is the proportion of the
observations belonging to a class. The sum of the frequencies in any frequency distribution always
equals the number of observations. The sum of the relative frequencies in any relative frequency
distribution always equals 1.00, and the sum of the percentages in a percent frequency distribution
always equals 100. A variation of the frequency distribution that provides another tabular summary
of quantitative data is the cumulative frequency distribution.
Source: Anderson et al. (2010)
Answer the next questions. Only answers in English will be allowed.
1. What is the main objective of a distribution frequency?
2. How can you identify the width of a class from the total data?
3. Is it correct to say that class limits are necessary for qualitative data? Explain your answer
4. Is it correct to affirm that the sum of the relative frequencies in any relative frequency
distribution always equals 2.00 and the sum of the percentage in a percent frequency
distribution always equals 200? Justify your answer.