Statistics for Business and Economics (13e)

Essentials
Slides by
of
ModernJohn Business Statistics (6e)
Loucks
Anderson, Sweeney, Williams, Camm, Cochran
St. Edward’s
© 2017 Cengage Learning
University

Slides by John Loucks

St. Edwards University

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 1
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Chapter 2, Part B
Descriptive Statistics: Tabular and Graphical Displays
• Summarizing Data for Two Variables Using Tables
• Summarizing Data for Two Variables Using Graphical Displays
• Data Visualization: Best Practices in Creating Effective Graphical Displays

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 2
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Summarizing Data for Two Variables sing Tables

• Thus far we have focused on methods that are used to summarize the data for
one variable at a time.
• Often a manager is interested in tabular and graphical methods that will help
understand the relationship between two variables.
• Crosstabulation is a method for summarizing the data for two variables.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 3
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation
• A crosstabulation is a tabular summary of data for two variables.

• Crosstabulation can be used when:

• one variable is categorical and the other is quantitative,
• both variables are categorical, or
• both variables are quantitative.
• The left and top margin labels define the classes for the two variables.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 4
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation
• Example: Finger Lakes Homes
The number of Finger Lakes homes sold for each style and price for the
past two years is shown below.

Price Home Style

Range Colonial Log Split A-Frame Total
< $250,000 18 6 19 12 55
> $250,000 12 14 16 3 45

Total 30 20 35 15 100

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 5
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation
• Example: Finger Lakes Homes
Insights Gained from Preceding Crosstabulation
• The greatest number of homes (19) in the sample are a split-level style
and priced at less than $250,000.

• Only three homes in the sample are an A-Frame style and priced at
$250,000 or more.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 6
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation
• Example: Finger Lakes Homes

Price Home Style

Range Colonial Log Split A-Frame Total
< $250,000 18 6 19 12 55
> $250,000 12 14 16 3 45

Total 30 20 35 15 100

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 7
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation: Row or Column Percentages

• Converting the entries in the table into row percentages or column
percentages can provide additional insight about the relationship between
the two variables.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 8
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation: Row Percentages

• Example: Finger Lakes Homes

Price Home Style

Range Colonial Log Split A-Frame Total
< $250,000 32.73 10.91 34.55 21.82 100
> $250,000 26.67 31.11 35.56 6.67 100

Note: row totals are actually 100.01 due to rounding.

(Colonial and > $250K)/(All > $250K) x 100 = (12/45) x 100

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 9
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation: Column Percentages

• Example: Finger Lakes Homes

Price Home Style

Range Colonial Log Split A-Frame
< $250,000 60.00 30.00 54.29 80.00
> $250,000 40.00 70.00 45.71 20.00

Total 100 100 100 100

(Colonial and > $250K)/(All Colonial) x 100 = (12/30) x 100

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 10
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Crosstabulation: Simpson’s Paradox

• Data in two or more crosstabulations are often aggregated to produce a
summary crosstabulation.
• We must be careful in drawing conclusions about the relationship between the
two variables in the aggregated crosstabulation.
• In some cases the conclusions based upon an aggregated crosstabulation can
be completely reversed if we look at the unaggregated data. The reversal of
conclusions based on aggregate and unaggregated data is called Simpson’s
paradox.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 11
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Summarizing Data for Two Variables

Using Graphical Displays
• In most cases, a graphical display is more useful than a table for recognizing
patterns and trends.
• Displaying data in creative ways can lead to powerful insights.
• Scatter diagrams and trendlines are useful in exploring the relationship between
two variables.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 12
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Scatter Diagram and Trendline

• A scatter diagram is a graphical presentation of the relationship between two
quantitative variables.
• One variable is shown on the horizontal axis and the other variable is shown on
the vertical axis.
• The general pattern of the plotted points suggests the overall relationship
between the variables.
• A trendline provides an approximation of the relationship.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 13
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Scatter Diagram
• A Positive Relationship

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 14
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Scatter Diagram
• A Negative Relationship

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 15
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Scatter Diagram
• No Apparent Relationship

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 16
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Scatter Diagram
• Example: Panthers Football Team
The Panthers football team is interested in investigating the relationship,
if any, between interceptions made and points scored.

x = Number of y = Number of
Interceptions Points Scored
1 14
3 24
2 18
1 17
3 30

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 17
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Scatter Diagram and Trendline

y
35
Number of Points Scored
30
25
20
15
10
5
0 x
0 1 2 3 4
Number of Interceptions

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 18
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Example: Panthers Football Team

• Insights Gained from the Preceding Scatter Diagram
• The scatter diagram indicates a positive relationship between the number of
interceptions and the number of points scored.
• Higher points scored are associated with a higher number of interceptions.
• The relationship is not perfect; all plotted points in the scatter diagram are
not on a straight line.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 19
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Side-by-Side Bar Chart

• A side-by-side bar chart is a graphical display for depicting multiple bar charts
on the same display.
• Each cluster of bars represents one value of the first variable.
• Each bar within a cluster represents one value of the second variable.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 20
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Side-by-Side Bar Chart

Finger Lake Homes
20
18
16 < $250,000
> $250,000
14
Frequency

12
10
8
6
4
2
Home Style
Colonial Log Split-Level A-Frame

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 21
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Stacked Bar Chart

• A stacked bar chart is another way to display and compare two variables on the
same display.
• It is a bar chart in which each bar is broken into rectangular segments of a
different color.
• If percentage frequencies are displayed, all bars will be of the same height (or
length), extending to the 100% mark.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 22
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Stacked Bar Chart

40 Finger Lake Homes
36
32
28
Frequency

< $250,000
24 > $250,000
20
16
12
8
4
Home Style
Colonial Log Split A-Frame

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 23
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Stacked Bar Chart

Finger Lake Homes
100
90
Percentage Frequency

80
70
60 < $250,000
> $250,000
50
40
30
20
10
Home Style
Colonial Log Split A-Frame

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 24
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Data Visualization: Best Practices

in Creating Effective Graphical Displays
• Data visualization describes the use of graphical displays to summarize and
present information about a data set.
• The goal is to communicate as effectively and clearly as possible the key
information about the data.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 25
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Creating Effective Graphical Displays

• Creating effective graphical displays is as much art as it is science.
• Here are some guidelines . . .
• Give the display a clear and concise title.
• Keep the display simple.
• Clearly label each axis and provide the units of measure.
• If colors are used, make sure they are distinct.
• If multiple colors or lines are used, provide a legend.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 26
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Choosing the Type of Graphical Display

• Displays used to show the distribution of data:
Bar Chart to show the frequency distribution or relative frequency
distribution for categorical data
Pie Chart to show the relative frequency or percent frequency for
categorical data
Dot Plot to show the distribution for quantitative data over the entire range
of the data
Histogram to show the frequency distribution for quantitative data over a
set of class intervals
Stem-and-Leaf Display to show both the rank order and shape of the
distribution for quantitative data

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 27
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Choosing the Type of Graphical Display

• Displays used to make comparisons:
Side-by-Side Bar Chart to compare two variables

Stacked Bar Chart to compare the relative frequency or Percent frequency of

two categorical variables

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 28
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Choosing the Type of Graphical Display

• Displays used to show relationships:
Scatter Diagram to show the relationship between two quantitative variables
Trendline to approximate the relationship of data in a scatter diagram

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 29
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Data Dashboards
• A data dashboard is a widely used data visualization tool.
• It organizes and presents key performance indicators (KPIs) used to monitor an
organization or process.
• It provides timely, summary information that is easy to read, understand, and
interpret.
• Some additional guidelines include . . .
• Minimize the need for screen scrolling.
• Avoid unnecessary use of color or 3D.
• Use borders between charts to improve readability.

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 30
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Data Dashboard Example

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 31
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

Tabular and Graphical Displays

Data
Categorical Data Quantitative Data

Tabular Graphical Tabular Graphical

Displays Displays Displays Displays

• Frequency • Bar Chart • Frequency Dist. • Dot Plot

Distribution • Pie Chart • Rel. Freq. Dist. • Histogram
• Rel. Freq. Dist. • Side-by-Side • % Freq. Dist. • Stem-and-
• Percent Freq. Bar Chart • Cum. Freq. Dist. Leaf Display
Distribution • Stacked • Cum. Rel. Freq. Dist. • Scatter
• Crosstabulation Bar Chart • Cum. % Freq. Dist. Diagram
• Crosstabulation

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 32
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (13e)

End of Chapter 2, Part B

© 2017 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 33
otherwise on a password-protected website or school-approved learning management system for classroom use.