ISL - 213E

STATISTICS - I
Istanbul Technical University
Faculty of Management
Department of Management Engineering
 Lecturer: Prof. Dr. Raziye Selim
Contact: [email protected]

Class Assistant:
Research Asistant: Hakan Yorulmus [email protected]

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 WEEK 1

Introduction to Statistics
Basic Concepts – Measurement Levels

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TOPICS

▰ Why a manager needs to know about statistics?

▰ What does a statistician do?
▰ Key definitions
▰ Descriptive versus inferential statistics
▰ Types of data and their sources
▰ Measurement levels

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Why a manager needs to know about statistics?

To know how to;

▰ properly present information ( summary of large sets of data)

▰ draw conclusions about populations based on sample information

▰ improve processes

▰ obtain reliable forecasts

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What does a statistician do?

▰ Collect data, to plan an experiment

▰ Exploratory data analysis

▰ Prediction

▰ Hypothesis test.

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What does Statistics mean?

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What does statistics mean?

1) Numerical descriptions
 price index,
 the success rate of a new business

2) Statistics is the science of data (statistical methods)

 collecting, classifying, summarising, organising, analysing
and interpreting numerical information (descriptive
statistics: numerical and graphical methods)

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 What does statistics mean?

3) Statistics means to utilize sample data to make estimates,

decisions, predictions, or other generalizations about
a larger set of data. (Inferential Statistics)

Examples:

- Opinion Polls: To estimate vote rates of parties before

election.
- Quality Control: What is the defective rate of any
production process?
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KEY DEFINITIONS

 A population (universe) is the collection of things under consideration

 A sample is a portion of the population selected for analysis

 A parameter is a summary measure computed to describe a

characteristic of the population

 A statistic is a summary measure computed to describe a

characteristic of the sample

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POPULATION AND SAMPLE

 Population
 Sample

Use parameters to  Use statistics to

summarize features summarize
features
 Inference on the population from the sample
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Statistical Methods

Statistical
Methods

Descriptive Inferential
Statistics Statistics

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Statistical Methods

▰ Descriptive statistics
• Collecting and describing data

▰ Inferential statistics
• Drawing conclusions and/or making decisions
concerning a population based only on
sample data

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 Descriptive Statistics

▰ Collect data
▻ e.g. Survey

▰ Present data
▻ e.g. Tables and graphs

▰ Characterize data
▻ e.g. Sample mean =
X i

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 Inferential Statistics

▰ Estimation
• e.g.: Estimate the population mean income using
the sample mean income

▰ Hypothesis testing
• e.g.: Test the claim that the population mean
income is 1050 new Turkish lira.

Drawing conclusions and/or making decisions

concerning a population based on sample results.

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 Data Sources

Primary Secondary

Print or Electronic

Observation Survey

Experimentation

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 Types of Data

Data

Categorical Numerical
(Qualitative) (Quantitative)

Discrete Continuous

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Categorical Data Numerical Data
Data whose measurement scale Data that are numeric and which
is inherently categorical. define value or quantity.

For example: For example:

gender, occupation the income level of people,
years of experience.
DATA MEASUREMENT LEVELS

The higher the data level, the more sophisticated

the analysis that can be performed

Measurement Levels

▰ Nominal Scale

▰ Ordinal Scale

▰ Interval Scale

▰ Ratio Scale

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 Nominal Scale

 Nominal scale is the weakest form of data measurement.

 A nominal scale classifies data into various distinct categories in

which no ordering is implied. The orders of categories is arbitrary.

For example:
A survey question that asks for different variables such as:

Variable Observation Values

Gender female, male

Personel computer ownership yes, no

Marital status married, single, divorced

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 Nominal Scale

Which statistics can be calculated with the nominal data?

 Frequencies

 Relative Frequencies

 Mode

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 Nominal Scale

Example: Employment Status

Employment Relative
Frequency
Status Frequency (%)
Wage/Salary 38 57.6

Self-employment 16 24.2

Employer 12 18.2

Total 66 100,0

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 Ordinal Scale

 At this level, the data elements can be rank-ordered on the

basis of some relationship among them.

For example:
We might measure the preference for a food product by asking a
consumer to rate the product’s taste on a scale from 1 to 5.

Variable Observation Values

Very Satisfied
Fairly Satisfied
Product Satisfaction Neutral
Fairly Unsatisfied
Very Unsatisfied

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 Ordinal Scale

Which statistics can be calculated with ordinal data?

 Frequencies

 Relative Frequencies

 Mode

 Median Value: that is the middle value when the data are arranged
in ascending order.

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 Interval Scale

 If the distance between two data items can be measured on some scale,
and the data have ordinal properties,
the data are said to be
interval data.

 The best example of interval data is the temperature scale.

Both the Fahrenheit and Celsius temperature
scales have ordinal properties.
Example: Temperature

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 Ratio Scale

 Data that have all the characteristics of interval data

but also have a true zero point
are called ratio data.

 Ratio measurement is the highest level of measurement.

Example: income, age, firm size

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 Example: IKSV Participant Profile
The typical audience of the Istanbul International Film Festival, organized by the
Istanbul Foundation for Culture and Arts,
 At ages 26-27,
 Single,
 A college graduate,
 24000 Turkish lira monthy income,
 A person with a good knowledge of English...

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Questions
a) What variables are given? What scale can be used to measure these
variables?
b) What kind of observation values ​can each variable take?
c) For which variable (s) can the following be calculated?
Mod
Median
Arithmetic mean
d) Which variable (s) can be proportioned between their different values?
e) What is the “single” value of the marital status variable? Is it the mode,
the median or the arithmetic mean?

Chap 1-28
 THANKS!

Any questions?


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 Presentation Design Credits

Presentation Template

 Catalina, Jimena. (2021). Salerio Powerpoint template.

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