Statistics for Business and Economics (14e, Metric

Version)

Statistics for
Business and Economics (14e)
Metric Version

Anderson, Sweeney, Williams, Camm, Cochran, Fry, Ohlmann

© 2020 Cengage Learning

© 2020 Cengage. 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 otherwise on
a password-protected website or school-approved learning management system for classroom use.
1
 Statistics for Business and Economics (14e, Metric
Version)

Chapter 1 - Data and Statistics

2
 Statistics for Business and Economics (14e, Metric
Version)

What Is Statistics?
• The term statistics (統計數據) can refer to
numerical facts such as averages, medians,
percentages, and maximums that help us
understand a variety of business and economic
situations.
• Statistics (統計學) can also refer to the art and
science of collecting, analyzing, presenting, and
interpreting data (資料、數據).

3
 Statistics for Business and Economics (14e, Metric
Version)

Applications in Business and

Economics (1 of 2)

Accounting (會計)
• Public accounting firms use statistical sampling procedures
when conducting audits (審計) for their clients.

Economics (經濟)
• Economists use statistical information in making forecasts
(預測) about the future of the economy or some aspect of
it.

Finance (財務)
• Financial advisors use price-earnings ratios (市盈率) and
dividend yields (股利) to guide their investment advice.

4
 Statistics for Business and Economics (14e, Metric
Version)

Applications in Business and

Economics (2 of 2)

Marketing (行銷)
• Electronic point-of-sale (銷售點) scanners at retail(零售)
checkout counters are used to collect data for a variety of
marketing research applications.

Production (生產)
• A variety of statistical quality control (品質管理) charts are
used to monitor the output of a production process.

Information Systems (資訊管理)

• A variety of statistical information helps administrators
assess the performance of computer networks.

5
 Statistics for Business and Economics (14e, Metric
Version)

Data and Data Sets

• Data (資料) are the facts and figures collected,
analyzed, and summarized for presentation and
interpretation.
• All the data collected in a particular study are
referred to as the data set (資料集) for the study.

6
 Statistics for Business and Economics (14e, Metric
Version)

Elements, Variables, and Observations

• Elements (要素) are the entities on which data are
collected.
• A variable (變數) is a characteristic of interest for
the elements.
• The set of measurements obtained for a particular
element is called an observation (觀察值).
• A data set with n elements contains n observations.
• The total number of data values in a complete data
set is the number of elements multiplied by the
number of variables.

7
 Statistics for Business and Economics (14e, Metric
Version)

Example Variables

GDP (billions of GDP per capita Total Population

Country current US$) (current US$) (millions)
Japan 5037.84 39727.12 126.81
Korea, Rep. 1724.85 33436.92 51.59
Philippines 346.84 3252.11 106.65
Thailand 506.75 7298.95 69.43

element names Source: World Development Indicator, year 2018 Observation

8
 Statistics for Business and Economics (14e, Metric
Version)

Categorical and Quantitative Data

• Data can be further classified as being categorical (
分類) or quantitative (量化).
• The statistical analysis that is appropriate depends
on whether the data for the variable are categorical
or quantitative.
• In general, there are more alternatives for statistical
analysis when the data are quantitative.

9
 Statistics for Business and Economics (14e, Metric
Version)

Categorical Data
• Labels or names are used to identify an attribute of
each element
• Often referred to as qualitative (質化) data
• Can be either numeric (數字) or nonnumeric (非數
字)
• Appropriate statistical analyses are rather limited

10
 Statistics for Business and Economics (14e, Metric
Version)

Example: housing data (made-up)

Apartment Type City Number of
Rooms
A Traditional apartment Taipei 2
B High-rise building Hsinchu 4
C Traditional apartment Taipei 4
D High-rise building Taoyuan 3
E Traditional apartment Taoyuan 2

11
 Statistics for Business and Economics (14e, Metric
Version)

Quantitative Data
• Quantitative data indicate how many or how much.
• Quantitative data are always numeric.

12
 Statistics for Business and Economics (14e, Metric
Version)

Cross-Sectional Data
Cross-sectional (橫斷面) data are collected at the
same or approximately the same point in time.

Example
GDP, GDP per capita and population for four
countries in 2018

13
 Statistics for Business and Economics (14e, Metric
Version)

Time Series Data (1 of 2)

Time series (時間序列) data are collected over several

time periods.

Example:

Exchange rate of NT dollar per US dollar in the past 24

months.

Graphs of time series data help analysts understand

• what happened in the past
• identify any trends over time, and
• project future levels for the time series
14
 Statistics for Business and Economics (14e, Metric
Version)

Exchange rate of TWD per USD,

August 1, 2020 to August 1, 2022

15
 Statistics for Business and Economics (14e, Metric
Version)

Panel Data
• Panel (longitudinal) (棋盤 or 面板) data
• The same cross-sectional units are followed over time
• Important benefits (control for unobserved
characteristics of units, analysis of lags in behavior,
implications of decision making

16
 Statistics for Business and Economics (14e, Metric
Version)

GDP (billions Total

of current GDP per capita Population
Country Year US$) (current US$) (millions)
Japan 2018 5037.84 39727.12 126.81
Japan 2019 5123.32 40458.00 126.63
Japan 2020 5040.11 39918.17 126.26
Japan 2021 4937.42 39285.16 125.68
Korea, Rep. 2018 1724.85 33436.92 51.59
Korea, Rep. 2019 1651.42 31902.42 51.76 Source: World
Korea, Rep. 2020 1637.90 31597.50 51.84 Development
Korea, Rep. 2021 1798.53 34757.72 51.74 Indicators
Philippines 2018 346.84 3252.11 106.65
Philippines 2019 376.82 3485.34 108.12
Philippines 2020 361.75 3301.22 109.58
Philippines 2021 394.09 3548.83 111.05
Thailand 2018 506.75 7298.95 69.43
Thailand 2019 544.08 7814.38 69.63
Thailand 2020 499.68 7158.77 69.80
Thailand 2021 505.98 7233.39 69.95

17
 Statistics for Business and Economics (14e, Metric
Version)

Descriptive Statistics
• 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 to understand.
• Such summaries of data, which may be tabular, graphical, or
numerical, are referred to as descriptive statistics (敘述統
計).

Example
The manager of Hudson Auto would like to have a better
understanding of the cost of parts used in the engine tune-
ups performed in her shop. She examines 50 customer
invoices for tune-ups. The costs of parts, rounded to the
nearest dollar, are listed on the next slide.

18
 Statistics for Business and Economics (14e, Metric
Version)

Example: Hudson Auto Repair

Sample of Parts Cost ($) for 50 Tune-ups (調整)

© 2020 Cengage. 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 otherwise on
a password-protected website or school-approved learning management system for classroom use.
19
 Statistics for Business and Economics (14e, Metric
Version)

Tabular Summary: Frequency (頻率)

and Percent Frequency
Parts Cost ($) Frequency Percent Frequency
50-59 2 4%
60-69 13 26%
70-79 16 32%
80-89 7 14%
90-99 7 14%
100-109 5 10%
TOTAL 50 100%

20
 Statistics for Business and Economics (14e, Metric
Version)

Graphical Summary: Histogram (直方圖)

Example: Hudson Auto

© 2020 Cengage. 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 otherwise on
a password-protected website or school-approved learning management system for classroom use.
21
 Statistics for Business and Economics (14e, Metric
Version)

Numerical Descriptive Statistics

• The most common numerical descriptive statistic is
the mean (or average) (平均).
• The mean demonstrates a measure of the central
tendency, or central location of the data for a
variable.
• Hudson’s mean cost of parts, based on the 50 tune-
ups studied is $79 (found by summing up the 50
cost values and then dividing by 50).

22
 Statistics for Business and Economics (14e, Metric
Version)

Statistical Inference
Population (母體): The set of all elements of interest in
a particular study.
Sample (樣本): A subset of the population.
Statistical inference (統計推論): The process of using
data obtained from a sample to make estimates and test
hypotheses about the characteristics of a population.
Census (普查): Collecting data for the entire population.
Sample survey (抽查、調查): Collecting data for a
sample. Example: Polls (民調)

23
 Statistics for Business and Economics (14e, Metric
Version)

Process of Statistical Inference

Example: Hudson Auto

© 2020 Cengage. 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 otherwise on
a password-protected website or school-approved learning management system for classroom use.
24
 Statistics for Business and Economics (14e, Metric
Version)

Analytics
Analytics (分析) is the scientific process of transforming
data into insight for making better decisions.
Techniques:
• Descriptive analytics (敘述分析): This describes what
has happened in the past.

• Predictive analytics (預測分析): Use models

constructed from past data to predict the future or to
assess the impact of one variable on another.

• Prescriptive analytics (規範分析): The set of analytical

techniques that yield a best course of action.

25
 Statistics for Business and Economics (14e, Metric
Version)

Big Data and Data Mining

Big data (大數據): Large and complex data set.

Three V’s of Big data:

Volume (總量): Amount of available data
Velocity (速度): Speed at which data is collected
and processed
Variety (多樣化): Different data types

26
 Statistics for Business and Economics (14e, Metric
Version)

Data Warehousing
Data warehousing (資料倉儲) is the process of
capturing, storing, and maintaining the data.
• Organizations obtain large amounts of data on a
daily basis by means of magnetic card readers, bar
code scanners, point of sale terminals, and touch
screen monitors.
• Wal-Mart captures data on 20-30 million
transactions per day.
• Visa processes 6,800 payment transactions per
second.
27
 Statistics for Business and Economics (14e, Metric
Version)

Data Mining
• Methods for developing useful decision-making
information from large databases.
• Using a combination of procedures from statistics,
mathematics, and computer science, analysts
“mine the data” (資料探勘) to convert it into useful
information.
• The most effective data mining systems use
automated procedures to discover relationships in
the data and predict future outcomes prompted by
general and even vague queries by the user.

28
 Statistics for Business and Economics (14e, Metric
Version)

Data Mining Applications

• The major applications of data mining have been
made by companies with a strong consumer focus
such as retail, financial, and communication firms.
• Data mining is used to identify related products
that customers who have already purchased a
specific product are also likely to purchase (and
then pop-ups are used to draw attention to those
related products).
• Data mining is also used to identify customers who
should receive special discount offers based on
their past purchasing volumes.

29
 Statistics for Business and Economics (14e, Metric
Version)

Data Mining Requirements

• Statistical methodology such as multiple regression
(多變數迴歸), logistic regression, and correlation (
相關性) are heavily used.
• Also needed are computer science technologies
involving artificial intelligence (人工智慧) and
machine learning (機器學習).
• A significant investment in time and money is
required as well.

30
 Statistics for Business and Economics (14e, Metric
Version)

Data Mining Model Reliability

• Finding a statistical model that works well for a
particular sample of data does not necessarily mean
that it can be reliably applied to other data.
• With the enormous amount of data available, the data
set can be partitioned into a training set (for model
development) and a test set (for validating the model).
• There is, however, a danger of overfitting the model to
the point that misleading associations and conclusions
appear to exist.
• Careful interpretation of results and extensive testing is
important.

31
 Statistics for Business and Economics (14e, Metric
Version)

Ethical Guidelines for Statistical Practice (1 of

2)

• In a statistical study, unethical (不合倫理) behavior can

take a variety of forms including:
• Improper sampling
• Inappropriate analysis of the data
• Development of misleading graphs
• Use of inappropriate summary statistics
• Biased interpretation of the statistical results
• One should strive to be fair, thorough, objective, and
neutral as you collect, analyze, and present data.
• As a consumer of statistics, one should also be aware of
the possibility of unethical behavior by others.
32
 Statistics for Business and Economics (14e, Metric
Version)

Ethical Guidelines for Statistical Practice

(2 of 2)

• The American Statistical Association developed the

report “Ethical Guidelines for Statistical Practice”.
• It contains 67 guidelines organized into 8 topic areas:
• Professionalism
• Responsibilities to Funders, Clients, and Employers
• Responsibilities in Publications and Testimony
• Responsibilities to Research Subjects
• Responsibilities to Research Team Colleagues
• Responsibilities to Other Statisticians/Practitioners
• Responsibilities Regarding Allegations of Misconduct
• Responsibilities of Employers Including Organizations,
Individuals, Attorneys, or Other Clients

33