Module 2:Descriptive

Statistics
PRESENTED BY: MRS. CATHERINE U. MALIG, MBA
REFERENCE: APPLIED BUSINESS STATISTICS BY: KEN BLACK
Ungrouped data- raw data or data that have not been
summarized in any way.

Grouped data- data that have been organized into a

frequency distribution

Each distinction is very important because the

calculation of statistics differs between the two types
of data
UNGROUPED GROUPED

60 years of Canadian Unemployment Rates

2.3 7.0 6.3 11.3 9.6 Frequency Distribution of 60 years
2.8 7.1 5.6 10.6 9.1 Unemployment Data for Canada
3.6 5.9 5.4 9.7 8.3 Class Interval Frequency
2.4 5.5 7.1 8.8 7.6
1-under 3 4
3.0 4.7 7.1 7.8 6.8
4.6 3.9 8.0 7.5 7.2 3-under 5 12
4.4 3.6 8.4 8.1 7.7 5-under 7 13
3.4 4.1 7.5 10.3 7.6
7-under 9 19
4.6 4.8 7.5 11.2 7.2
9-under 11 7
6.9 4.7 7.6 11.4 6.8
6.0 5.9 11.0 10.4 6.3 11-under 13 3
2.9 6.4 12.0 9.5 6.0
Frequency Distributions
This is the summary of data presented in the form of class intervals
and frequencies. It is constructed according to individual business
researchers’ taste.
Steps in FD:
1. Determine the range
2. Determine how many classes it will contain 5 or 15 classes as a
rule of thumb.
3. Determine the width of the class interval
Class Midpoint
Class midpoint or the class mark is the value halfway across the class interval. It can be
calculated by the average of two class endpoints.
Example: Using the grouped data
Class Interval Frequency Class Midpoint Relative Cumulative
Frequency Frequency
1-under 3 4 2 .0667 4
3-under 5 12 4 .2000 16
5-under 7 13 6 .2167 29
7-under 9 19 8 .3167 48
9-under 11 7 10 .1167 55
11-under 13 3 12 .0833 60
TOTAL 60
Relative & Cumulative Frequency
Relative frequency- It is the proportion of the total frequency that is
in any given class interval in a frequency distribution.
It is calculated as individual class frequency divided by total
frequency:
Example:4/60=.0667
Cumulative frequency- is a running total of frequencies through the
classes of frequency distribution
Example: 4+12=16
Exercises
The following data are the average weekly mortgage interest rates for a 40 -week period.
Construct the frequency distribution, and calculate and display the class midpoints, relative
frequencies and cumulative frequencies for this frequency distribution.
7.29 7.23 7.11 6.78 7.47
6.69 6.77 6.57 6.80 6.88
6.98 7.16 7.30 7.24 7.16
7.03 6.90 7.16 7.40 7.05
7.28 7.31 6.87 7.68 7.03
7.17 6.78 7.08 7.12 7.31
6.97 6.35 6.96 7.29 7.16
7.40 6.96 7.02 7.13 6.84
Solution
Classes= 7
The range of data = 1.33 (7.68-6.35)
Class Width =Range/no. of classes= 1.33/7=0.19
Interval Frequency Class Relative Cumulative
midpoint Frequency Frequency
6.30-under 6.50 1 6.40 .025 1
6.50-under 6.70 2 6.60 .050 3
6.70-under 6.90 7 6.80 .175 10
6.90-under 7.10 10 7.00 .250 20
7.10-under 7.30 13 7.20 .326 33
7.30-under 7.50 6 7.40 .150 39
7.50-under 7.70 1 7.60 .025 40
Total 40
Quantitative Data Graphs
Through graphs and charts, the decision maker can often get a
overall picture of the data and reach some useful conclusions merely
by studying the chart or graph.

Converting data to graphics can be creative and artful.

Quantitative data graphs are plotted along numerical scale while
qualitative are plotted using non-numerical categories.
Quantitative Data Graphs
Five types of quantitative data graphs:
1. Histogram
2. Frequency polygon
3. Ogive
4. Dot plot
5. Stem-and-leaf plot
 Histogram
How to define a histogram, interpret a histogram and create a histogram from data?

A histogram is a bar graph that represents a frequency distribution. The width

represents the interval and the height represents the corresponding frequency. There
are no spaces between the bars.
It is a series of contiguous rectangles that represent the frequency of data in given class
intervals.
A histogram is a graph that represents the number of data values falling in an interval
with a bar. The horizontal axis shows the intervals and the vertical axis shows the
frequencies (how many data values are in the interval). Each interval should be the
same width and the bars should touch each other.
Histogram
 BASIS FOR COMPARISON HISTOGRAM BAR GRAPH
Meaning Histogram refers to a graphical Bar graph is a pictorial
representation, that displays data representation of data that uses
by way of bars to show the bars to compare different
frequency of numerical data. categories of data.

Indicates Distribution of non-discrete Comparison of discrete

variables variables
Presents Quantitative data Categorical data
Spaces Bars touch each other, hence there Bars do not touch each other,
are no spaces between bars hence there are spaces between
bars.
Elements Elements are grouped together, so Elements are taken as individual
that they are considered as ranges. entities.

Can bars be reordered? No Yes

Width of bars Need not to be same Same
 Frequency Polygons
A frequency polygon, like the histogram, is
a graphical display of class frequencies.
However, instead of using bars or rectangles
like a histogram, in a frequency polygon
each class frequency is plotted as a dot at
the class midpoint, and the dots are
connected by a series of line segments.
Ogive
An ogive (o-jive) is a cumulative frequency
polygon. Construction begins by labeling the
x-axis with the class endpoints and the y-axis
with the frequencies.
Ogives are most useful when the decision
maker wants to see running totals. For
example, if a comptroller is interested in
controlling costs, an ogive could depict
cumulative costs over a fiscal year.
Dot Plots
A relatively simple statistical chart
that is generally used to display
continuous, quantitative data is the
dot plot. In a dot plot, each data
value is plotted along the
horizontal axis and is represented
on the chart by a dot. If multiple
data points have the same values,
the dots will stack up vertically
Stem-and Leaf Plots
Another way to organize raw data into groups
besides using a frequency distribution is a
stem-and-leaf plot. This technique is simple
and provides a unique view of the data.
A stem-and-leaf plot is constructed by
separating the digits for each number of the
data into two groups, a stem and a leaf.
EXERCISES
Qualitative Data Graphs
Qualitative graphs are plotted using non-numerical
categories. In this module, there are three types of
qualitative data graphs:
(1) pie charts,
(2) bar charts, and
(3) Pareto charts.
 Pie Charts
A pie chart is a circular depiction of data where the area of the whole pie represents 100% of the data and
slices of the pie represent a percentage breakdown of the sublevels. Pie charts show the relative magnitudes
of the parts to the whole.
Bar Graphs
A bar graph or chart contains two or more categories along one axis and a series of bars, one
for each category, along the other axis. Typically, the length of the bar represents the
magnitude of the measure (amount, frequency, money, percentage, etc.) for each category.
 Pareto Graphs
Pareto analysis is a quantitative tallying of the number and types of defects that occur with a
product or service. Analysts use this tally to produce a vertical bar chart that displays the most
common types of defects, ranked in order of occurrence from left to right. The bar chart is
called a Pareto chart.
Company officials examine the records of several hundred of the motors in which at least one
defect was found to determine which defects occurred more frequently. They find that 40% of
the defects involved poor wiring, 30% involved a short in the coil, 25%, involved a defective
plug, and 5% involved cessation of bearings. A Pareto chart constructed from this information.
It shows that the main three problems with defective motors—poor wiring, a short in the coil,
and a defective plug—account for 95% of the problems. From the Pareto chart, decision
makers can formulate a logical plan for reducing the number of defects. Company officials
Pareto Graphs
EXERCISES
Chart and Graphs for two Variables
Many times in business research it is important to explore the
relationship between two numerical variables. A more detailed
statistical approach is given in chapter 12, but here we present
a graphical mechanism for examining the relationship between
two numerical variables—the scatter plot (or scatter diagram).
A scatter plot is a two-dimensional graph plot of pairs of points
from two numerical variables.
Cross Tabulation
It is a process for producing a two-dimensional
table that displays the frequency counts for two
variables simultaneously. It is also referred to as
contingency table or pivot table.
Scatter Plot
A scatter plot is a two-dimensional graph plot of pairs of points from two numerical variables.
END OF MODULE 2