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BRM - Chapter 1 - What Is Statistics

This document discusses key concepts in statistics including: 1) Statistics is a way to extract useful information from data using techniques like descriptive statistics and inferential statistics. Descriptive statistics organizes and summarizes data while inferential statistics draws conclusions about populations from samples. 2) Key terms include population (the whole group), parameter (a measure of the population), sample (a subset of data), statistic (a measure of the sample), and statistical inference (using a sample to learn about a population). 3) Statistical inference provides estimates of populations from samples and measures the reliability using confidence level (how often the estimate is correct) and significance level (how often conclusions are wrong).

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94 views2 pages

BRM - Chapter 1 - What Is Statistics

This document discusses key concepts in statistics including: 1) Statistics is a way to extract useful information from data using techniques like descriptive statistics and inferential statistics. Descriptive statistics organizes and summarizes data while inferential statistics draws conclusions about populations from samples. 2) Key terms include population (the whole group), parameter (a measure of the population), sample (a subset of data), statistic (a measure of the sample), and statistical inference (using a sample to learn about a population). 3) Statistical inference provides estimates of populations from samples and measures the reliability using confidence level (how often the estimate is correct) and significance level (how often conclusions are wrong).

Uploaded by

Sasin Sasikala
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BRM- Chapter 1- What is statistics?

Statistics: A way to get information from data.

Statistician: A person who uses statistical techniques properly. Examples of statistics practitioners
are: financial analyst, economist, market researcher.

Descriptive Statistics: Methods of organising, summarising, and presenting data in a convenient and
informative way. One form of descriptive statistics uses graphical techniques that allow statistics
practitioners to present data in ways that make it easy for the reader to extract useful information.
Another form of descriptive statistics uses numerical techniques to summarise data e.g. mean or
average.

Measure of central location: The specific information we would like to extract. E.g. a grade average.

Measure of variability: Range Subtracting the smallest number from the largest in a row of
numbers.

Inferential statistics: A body of methods used to draw conclusions or inferences about characteristics
of populations based on sample data. The population in question in this case is the university’s
students. The characteristics of interest is the soft drink consumption of this population. The cost of
interviewing each student in the population would be prohibitive and extremely time consuming.
Instead, we can sample a much smaller number of students (e.g. size 500) and infer from the data
the number of soft drinks consumed by all 50,000 students.

Exit polls: A random sample of voters who exit the polling booth are asked for whom they voted.
From the data, the sample proportion of voters supporting the candidates is computed. A statistical
technique is applied to determine whether there is enough evidence to infer that the leading
candidate will garner enough votes to win.

Key Statistical Concepts:

Population: The group of all items of interest to a statistics practitioner. It is frequently very large
and may, in fact, be infinitely large. In the language of statistics, population does not necessarily refer
to a group of people. It may, for example, refer to the population of ball bearings produced at large
plant. In Case 12.1, the population of interest consists of the 50,000 students on campus. In example
12.5, the population consists of the Floridians who voted for Bush or Gore.

Parameter: A descriptive measure of a population. The parameter of interest in Case 12.1 is the
mean number of soft drinks consumed by all the students at the university. The parameter in
Example 12.5 is the proportion of the 5 million Florida voters who voted for Bush. In most
applications of inferential statistics the parameter represents the information we need.

Sample: A set of data drawn from the studied population. A descriptive measure of a sample is
called a statistic. We use statistics to make inferences about parameters. In case 12.1, the statistic
we would compute is the mean number of soft drinks consumed in the last week by the 500 students
in the sample. We would then use the sample mean to infer the value of the population mean, which
is the parameter of interest in this problem. In example 12.5, we compute the proportion of the
sample of 765 Floridians who voted for Bush. The sample statistic is then used to make inferences
about the population of all 5 million voters- that is, we predict the election results even before the
actual count.

Statistical inference: The process of making an estimate, prediction, or decision about a population
based on a sample data. Because populations are almost always very large, investigating each

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member of the population would be impractical and expensive. However, such conclusions and
estimates are not always going to be correct. For this reason, we build into the statistical inference a
measure of reliability. There are two such measures: The Confidence level and Significance level.

Confidence level: The proportion of times that an estimating procedure will be correct. For example,
in Case 12.1, we will produce an estimate of the average number of soft drinks to be consumed by all
50,000 students that has a confidence level of 95%. Estimates based on this form of statistical
inference will be correct 95% of the time.

Significance level: Measures how frequently the conclusion will be wrong. A 5% significance level
means that samples that lead us to conclude that Bush wins the election, will be wrong 5% of the
time.

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