Hawassa University College of Business & EconomicsManagement Department

CHAPTER TWO
2. DATA COLLECTION AND PRESENTATION
2.1. Data collection
Statistical investigation is a comprehensive and requires systematic collection of data about some group
of people or objects, describing and organizing the data, analyzing the data with the help of different
statistical method, summarizing the analysis and using these results for making judgments, decisions and
predictions. The validity and accuracy of final judgment is most crucial and depends heavily on how well
the data was collected in the first place. The quality of data will greatly affect the conditions and hence at
most importance must be given to this process and every possible precaution should be taken to ensure
accuracy while collecting the data.

2.1.1 What is data?

 Data are facts/values that variables will assume.
 Data are a raw fact that will be used to draw a conclusion or make a decision.
 It is a raw numerical description of a variable ready to be analyzed which is obtained by
measuring or counting.
 In research, statisticians use data in many different ways. Data can be used to describe situations
or events or to make an inference

2.1.2 Classification of data

Data are classified as:
i. quantitative or qualitative data
ii. Primary or secondary data
iii. Time series or cross sectional data

i) quantitative or qualitative data

a. Quantitative data are data that is expressed numerically or they are numerical observations of
variables. Example: age, Grade Point Average (GPA), Sales, etc. Valid computations such as
mean, variance, etc are possible in the case of quantitative data.
b. Qualitative data: data that is non-numeric. Example: marital status (married single, widowed,
divorce), race (Asian, African, etc), gender (male/female), blood type (A, B, O, AB). Valid
Computation: Proportions in each category are possible, Example. What percent of students in
this class is female?

ii) Primary or Secondary data

a) Primary Data
 Data originally collected by the researcher for the purpose/problem at hand.
 Data generated from primary source of data.
 Data that are collected by the investigator himself for the purpose of a specific inquiry or
study.
b) Secondary data
 When an investigator uses data, which have already been collected by others, such data
are called “secondary data.”
 Data generated from a secondary source of data.
 Data generated by someone else for some other purpose.
 The secondary data can be obtained from journals, reports, government publications,
publications of professionals and research organizations, internet, videos, library, etc.
 One must be very careful before using secondary data as it may contain errors like
transcribing errors, estimating errors, errors due to bias, etc
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iii) Cross sectional or time series data

a) Cross Sectional Data: A data collected from a population at a given point in time.
Example: The data collected on household of a town in 2001 can be presented as a cross sectional
data as follows:

Observation Number Monthly household income in Birr

1 200
2 300
3 189

b) Time series data: Data collected overtime on one or more variables.

Example:

Year Unemployment rate

1950 5%
1951 8%
1952 10%

2.1.3. Methods of data collection

Sources of data
There are two sources of data: These are primary sources and secondary sources.
i. Primary sources
 It is source of data that provide first hand information for the use of immediate purpose.
 Data collected from primary sources are called primary data.
 Data collected from primary sources are new data which had not existed before and for which the
researcher received full credit.
ii. Secondary sources
 Individuals or agencies which provide data originally collected for other purpose by them or by
others.
 Usually they are published or unpublished materials, records, reports, magazines, market reports,
etc.
 Data which is not originated by the investigator himself but which he gets from some one’s
records.
 Compared to primary data, which is costly but accurate and more reliable, a secondary data is less
costly and less accurate.
 Primary data at some time can be secondary if someone else uses it.
 Secondary sources exist as storage of previously collected information. Example: Archival or
library sources, published books, unpublished documents, videos, internet, annual reports,
statistical abstracts, census of population, economic censuses, etc.
Methods of collecting primary data
a) Survey research
b) Experimentation
c) Observational research
a) Survey research
In survey research, we communicate with a sample of individuals to generalize on the characteristics of
the population from which the samples were drawn.
Types of surveys: Three most common surveys are:-
i. The mail survey: It can be electronic mail (e-mail) or through the post office.

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Characteristics of mail survey

1. The individual should be literate to give an appropriate response
2. Non-response error may be high if mailing is costly.
3. This survey can be used to cover a wider geographic area than telephone surveys or personal
interviews since mailed questionnaire surveys are less expensive to conduct.
4. It has low number of responses and inappropriate answers to questions.
5. It has low return rate.
6. Some people may have difficulty in reading or understanding the question.
Questionnaire is a set of questions printed on a paper. Questionnaires: - are groups or sequences of
questions designed to collect data upon a subject. The questionnaire is either filled out personally by the
respondent or administered and completed by interviewer.
Characteristics of a good questionnaire:
1. Number of questions should be minimum.
2. Questions should be in logical orders, moving from easy to more difficult questions.
3. Questions should be short and simple. Technical terms and vague expressions capable of different
interpretations should be avoid
4. Personal questions and questions which require memory power and calculations should also be
avoided.
5. Questions should be carefully framed so as to cover the entire scope of the survey.
6. Physical appearance should be attractive, sufficient space should be provided for answering each
question.
Types of questions:
o Multiple choice
o Dichotomous (having only two choices (yes/no, female/male, etc).
o Open – ended (where the respondents are free to give any responses).
ii. The personal interview: It is an oral questioning of respondents either individually or in group.
Characteristics of personal interview
1) It tends to be relatively expensive and time consuming and hence not ideal to large group of
informants.
2) It offers a lot of flexibility in allowing the interviewer to explain questions, to probe more deeply
in to the answers provided.
3) It is more accurate and reliable.
4) It maximizes trust and cooperation between interviewer and the interviewee.
5) It has a higher rate of response.
6) It decreases refusals.
7) The investigator presents himself personally before the informant and questions carefully.
8) It is useful in situations where great depth study is required.
9) In face to face interview, the interviewer can see and assess the respondent’s non–verbal
behaviors.
10) Face – to- face interviews can take place with respondents who don’t have phones or the ability
to read a mailed questionnaire.
iii. The Telephone interview
Characteristics of telephone interview
1. It is similar to the personal interview, but uses telephone instead of personal interaction.
2. It makes it possible to complete a study in a relatively short span of time.
3. It has high response rate.
4. It is less effective in a community with few number of telephone lines.
5. It is less costly than personal interview.

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b) Experimentation
 We record the results of our experiment.
 In experimentation, researchers are interested to identify the cause and effect relationships
between variables.
c) Observational Research
 We see what is happening and record it. E.g. traffic accident, etc
 Observation relies on watching or listening, then, counting or measuring.
 There are no respondents.
 It is time consuming/expensive.

2.2. Data Presentation

2.2.1. Tabular Methods of Data Presentation
Tabulation is the arrangement of information or data in tables. There are various techniques of
tabulation.
a) Data Array is a table showing data arranged in descending or ascending order.
 Descending (100, 99, 98, 97 ……..)
 Ascending (1, 2, 3,4,5,6,7,8,9 …………)
Examples:
 An alphabet list of post office renters can be considered as a data array of quantitative
information.
 A list of monthly income recorded for several years and arranged in descending or ascending
order is a data array.
In general, the data array offers a number of advantages:
a. We can determine at a glance the highest and lowest values contained in the data.
b. We can identify groups of similar data values.
c. We can easily see differences between values in the data.
b) Frequency Distribution
A frequency distribution is a table that group data in to non-overlapping intervals called classes and
records the number of observations in each class. The frequency distribution summarizes data in a
condensed form that can be readily understood and easily interpreted.
Key Terms in frequency distribution
Class: Each category of the frequency distribution is called a class.
Frequency is the number of data values falling within each class.
Total frequency: - the sum of class frequencies.
Class Limits are the boundaries for each class. These determine which data values are assigned to that
class. Class limits can be lower or upper class limits and they have the same decimal value as the data
value.
Class boundaries are those limits which are determined mathematically so that no gap exists between
classes. It is also called true class limits.
Class interval is the width of each class. This is the difference between the lower limits/upper limit of
the class and the lower limit/upper limit of the next higher cl
ass.
¿
Approximate class width = Ran≥ Number of clsses desired ¿
Range = Maximum value - Minimum value
Class Mark is the midpoint of each class. This is mid way between the upper and lower class limits.
Guidelines for the frequency distribution
In constructing a frequency distribution for a given data set, the following guidelines should be followed.
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a) The set of classes must be mutually exclusive. That is, a given data value should fall into only one
class/category. There should be no overlap between classes and limits.
b) The class must be exhaustive. That is, we have to include all possible data values. No data value
should fall outside the range covered by the frequency distribution.
c) If possible, the classes should have equal widths. Unequal class widths make it difficult to interpret
both frequency distribution and their graphical presentation. One exception occurs when there is an
open-ended distribution i.e., it has no specific beginning value or no specific ending value. In open –
ended classes, the lowest class lacks a lower limit or the highest class lacks an upper limit. Open – ended
classes are classes with either no lower limit or no upper limit.
d) Selecting the number of classes to use. There is no hard and fast rule to determine the number of
classes of a data set but it is a subjective process. If we have too few classes important characteristics of
the data may be buried within the small number of categories. If there are too many classes, many
categories will contain either zero or a small number of values. In general 5 to 20 classes will be suitable
or recommended.
e) When possible, class widths should be rounded numbers (e.g. 5, 10, 25, 50,100 etc)
f) If possible, avoid using open – ended classes.
Types of frequency distributions
There are three types of frequency distribution tables. These are:-
a. the absolute frequency
b. the relative frequency
c. the cumulative frequency
a) Absolute frequency: An absolute frequency distribution table shows the absolute number of
occurrences of an entry or groups of entries in a data set. To construct an absolute frequency distribution
table, list all the scores in the first column and count the number of times each score occurs in the
original data set. Record this against each item in the second column.
b) Relative frequency: The relative frequency distribution table shows the number of occurrence of
each item or class of items in the data set as a proportion of the total number of observation. This can be
AF AF
expressed in decimal, fraction or percentage form. RF = = where n is total number of
TF n
observations, RF = Relative frequency, AF = Absolute Frequency, TF = total Frequency (number of
observations that is, n)
c) Cumulative frequency: The cumulative frequency distribution table shows the absolute frequency of
occurrence added at each successive class in the data set. Alternatively one can use the relative
cumulative frequency table based on relative frequencies.
Given the following frequency distribution

Class Limit Class Absolute Cumulative Relative Cumulative

Boundaries frequency frequency frequency Relative
frequency
24-30 23.5-30.5 3 3 3/25 3/25
31-37 30.5-37.5 1 4 1/25 4/25
38-44 37.5-44.5 5 9 5/25 9/25
45-51 44.5-51.5 9 18 9/25 18/25
52-58 51.5-58.5 6 24 6/25 24/25
59-65 58.5-65.5 1 25 1/25 25/25
Total 25
n n
fi
∑ f 1=n=25 , ∑ n
=1<37.5=4 ≥ 30.5=22
i=1 i=1

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The class boundaries in the second column are used to separate classes so that there are no gaps in the
frequency distribution. The basic rule of thumb is that the class limits should have the same decimal
place value as the data, but the class boundaries should have one additional place value. Example: lower
limit – 0.5 = 31-0.5 = 30.5 => lower boundary ; upper limit +0.5 = , 37+0.5 = 37.5 => upper boundary
The “less than” and “more than” cumulative frequencies
The “less than” cumulative frequency of a class is the total frequency of all values less than the upper
boundary of the class and the “more than” cumulative frequency of a class is the total frequency of all
values which are greater than the lower boundary of the class.

Example:

Class Class Upper Absolute Relative Less than Lower More than
Limits boundaries boundaries frequency frequency Cumulativ boundaries Cumulative
e frequency
frequency
100-104 99.5-104.5 104.5 2 0.04 2 99.5 50
105-109 104.5-109.5 109.5 8 0.16 10 104.5 48
110-114 109.5-114.5 114.5 18 0.36 28 109.5 40
115-119 114.5-119.5 119.5 13 0.26 41 114.5 22
120-124 119.5-124.5 124.5 7 0.14 48 119.5 9
125-129 124.5-129.5 129.5 1 0.02 49 124.5 2
130-134 129.5-134.5 134.5 1 0.02 50 129.5 1
Total 50

Example: The following data is given on a monthly household income of a community, construct a
frequency distribution and calculate
a. The absolute, relative and cumulative frequencies
b. The less than and the more than cumulative frequencies
c. Interpret the values found at (a) and (b) above
Date set
112 100 127 120 134 105 110 118 109 112
110 118 117 116 118 114 114 122 105 109
107 112 114 115 118 118 122 117 106 110
116 108 110 121 113 119 111 120 104 110
120 113 120 117 105 118 112 110 114 114
n = 50
Solution: Steps:
1. Array the data
2. Determine the number of classes
Rule of thumbs
i) We could use the Sturge’s formula to determine the number of classes (k): K = 1+ 3.322logn where n
is the number of observations.
In this case, k =1+3.322log50, log 50 = 1.7 = 1+3.322x1.7=1+5.64 = 6.64 ≈ 7
ii) Apply the 2k rule: This guide suggests you to select the smallest number (k) for the number of classes
such that2k is greater than the number of observations.

n = 50, 25 = 32, 32 < 50,26 = 64 > 50, so the recommended number of classes is 6.

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3. Determine the class interval /width

Width = Range/Number of class
Highest value = 134
Lowest value = 100
34
Range = 134 – 100 = 34, k recommended = 7, width = =¿ 4.9 (round the answer up to the
7
nearest whole number 4.9 ≈ 5)
4. Select a starting point for the lowest class limit. This can be the smallest data value or any convenient
number less than the smallest data value. In this case let us use 100 as a starting point. Add the width to
the lowest score taken as the starting point to get the lower limit of the next class. Keep adding until
there are 7 classes. Subtract one unit from the lower limit of the second class to get the upper limit of the
first class. Then add the width to each upper limit to get all the upper limits.
105 – 1 = 104
1st class = 100 – 104
2nd class = 105 – 109, etc
Find the class boundaries by subtracting 0.5 from each lower class limit and adding 0.5 to each upper
class limit.
99.5 – 104.5 = 99.5 ≤ x < 104.5, [99.5, 104.5), half closed interval.
104.5 – 109.5 = 104.5 ≤ x< 109.5, [104.5, 109.5)
5. Tally the data
6. Find the frequency from the tallies. The completed frequency distribution is given as:

Class Class Upper Absolute Relative Less than Lower More than
Limits boundaries boundaries frequency frequency Cumulativ boundaries Cumulative
e frequency
frequency
100-104 99.5-104.5 104.5 2 0.04 2 99.5 50
105-109 104.5-109.5 109.5 8 0.16 10 104.5 48
110-114 109.5-114.5 114.5 18 0.36 28 109.5 40
115-119 114.5-119.5 119.5 13 0.26 41 114.5 22
120-124 119.5-124.5 124.5 7 0.14 48 119.5 9
125-129 124.5-129.5 129.5 1 0.02 49 124.5 2
130-134 129.5-134.5 134.5 1 0.02 50 129.5 1
Total 50

* Note that the sum of the relative frequencies is always 1 or 100%. That is,
n

∑ ( fin ¿ )=1 ¿
i=1
c) Interpretation
 31 (18+13) of the households earn a monthly income from birr 110 – 119
 62% of the households earn a monthly income from birr 110 – 119 (31/50 ×100%)
 28 of the households earn a monthly income less than birr 114.5
 40 of the households earn a monthly income at least birr 109.5
The reasons for constructing a frequency distribution are:
a. To organize the data in a meaningful way
b. To enable researchers to draw charts and graphs for the presentation of data.
c. To enable a reader to make comparisons among different data sets.

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2.2.2. Graphic Method of Data Presentation

After the data have been organized into a frequency distribution, they can be presented in graphical form.
Why graphs? Graphs are used to:-
 Convey the data to the viewers in pictorial /graphic form,
 Get the audiences’ attention in a publication or a speaking presentation,
 Discuss an issue, reinforce a critical point, or summarize a data set,
 Make more understandable than data presented in tables and frequency distribution,
 Discover a trend or pattern in a situation over a period of time.
The three most common used graphs in research are:-
a. The Histogram
b. The frequency polygon
c. The cumulative frequency graph or O-give

a) The Histogram: - is a graph that displays the data by using adjacent vertical rectangles (unless
frequency of a class is zero) of various heights to represent the frequencies of the classes. That is, in a
histogram the class boundaries are marked on the horizontal axis and the class frequencies on the vertical
axis. N.B: The length of adjacent rectangles of a histogram (along the y-axis) can be the absolute or
relative frequencies of a class. The tallest rectangle in a histogram is associated with a class having the
greatest number of observations (frequencies).
Example: Below is the frequency distribution of the selling prices of vehicles sold at Nyala Motors last
month. Construct a histogram.
Selling Prices Frequency
(Thousands of birr)
170 up to 180 4
180 up to 190 12
190 up to 200 6
200 up to 210 8
210 up to 220 11
220 up to 230 3
230 up to 240 10
240 up to 250 6
Total 60

Solution: To construct a histogram, the class frequencies are scaled along the vertical axis (Y-axis) and
either the class limits or the class midpoints along the horizontal axis. The complete histogram is shown
in the above chart. Note that there is no space between the bars. This is a feature of histogram. In bar
charts, which are described in a later section, the vertical bars are separated slightly.

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Selling price
Histogram of the Selling Prices of 60 automobiles at Nyala Motors
Thus, the histogram provides an easily interpreted visual representation of a frequency distribution. We
should also point out that we would have reached the same conclusions and the shape of the histogram
would have been the same had we used a relative frequency distribution instead of the actual frequencies.
That is, if we had used the relative frequencies, we would have had a histogram of the same shape as
Chart 2-1. The difference is that the vertical axis would have been reported in percent of vehicles instead
of the number of vehicles.

Frequency Polygon
A frequency polygon is similar to histogram. It consists of line segments connecting the points formed
by the intersections of the class midpoints and the class frequencies. The construction of a frequency
polygon is illustrated in Chart 2-1. We use the vehicle selling prices for the cars sold last month at Nyala
Motors. The midpoint of each class is scaled on the X-axis and the class frequencies on the Y-axis.
Recall that the class midpoint is the value at the centre of a class and represents the value in the class.
The class frequency is the number of observations in a particular class. The vehicle selling prices at
Nyala Motors are:

Selling Prices (Thousands of birr) Midpoint Frequency

170 up to 180 175 4
180 up to 190 185 12
190 up to 200 195 6
200 up to 210 205 8
210 up to 220 215 11
220 up to 230 225 3
230 up to 240 235 10
240 up to 250 245 6
Total 60

As noted previously, the 170,000 up to 180,000 classes is represented by the midpoint, 175,000. To
construct a frequency polygon, move horizontally on the graph to the midpoint, 175, and then vertically
to 4, the class frequency, and place a dot. The X and Y values of this point are called the coordinates. The
coordinates of the next point are X = 185 and Y = 12. The process is continued for all classes. Then, the
points are connected in order. That is, the point representing the lowest class is joined to the one
representing the second class and so on.

14
12
10
Frequency

8
6
4
2
0
165 175 185 185 205 215 225 235 245 255
Selling price (in 000)

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Frequency Polygon of the Selling Prices of 60 automobiles at Nyala Motors

Both the histogram and the frequency polygon allow us to get a quick picture of the main characteristics
of the data (highs, lows, point of concentration, etc.). Although the two representations are similar in
purpose, the histogram has the advantgae of depciting each class as a rectangle, with the area of the
rectanglural bar representing the number in frequencies of each class. The frequency polygon, in turn,
has an advantage over the histogram. It allows us to compare direclty two or more frequency
distributions.

Cumulative Frequency Curve (Ogive)

The cummulative frequency curve also some times known as ogive is a graphic representation of the
cumulative frequency distribution. A cumulative frequency curve (ogive) drawn to represent a less than
cumulative frequency distribution is called a less than ogive. A cumulative frequency curve (ogive)
drawn to represent a more than cumulative frequency distribution is called a more than ogive.
Consider once again the distribution of the selling prices of vehicles at Nyala Motors. Suppose we were
interested in the number of vehicles that sold for less than 210,000, or the value below which 50 percent
of the vehicles sold. These numbers can be approximated by developing a cumulative frequency
distribution.
Example: The frequency distribution of the automobile selling prices at Nyala Motors is repeated from
Construct a less than ogive.
Selling Prices Frequency
(Thousands of birr)
170 up to 180 4
180 up to 190 12
190 up to 200 6
200 up to 210 8
210 up to 220 11
220 up to 230 3
230 up to 240 10
240 up to 250 6
Total 60
Solution: As the name implies, a cumulative frequency distribution and a cumulative frequency ogive
require cumulative frequencies. To construct a less-than cumulative frequency distribution, refer to the
preceding table and note that there were four vehicles sold for less than 180,000. Those four vehicles,
plus the 12 in the next higher class, for a total of 16, were sold for less than 190,000. The cumulative
frequency for the next higher class is 22, found by 4 + 12 + 6 = 22. This process is continued for all the
classes. All the vehicles were sold for less than 250,000. (See the Table below)

Selling Prices Cumulative

(Thousands of birr) Frequency Frequency Found by
170 up to 180 4 4
180 up to 190 12 16 4 + 12
190 up to 200 6 22 4 + 12 + 6
200 up to 210 8 30 4 + 12 + 6 + 8
210 up to 220 11 41
220 up to 230 3 44
230 up to 240 10 54
240 up to 250 6 60

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Total 60
Less Than Cumulative Frequency Distribution for Vehicle Selling Price
To plot a less-than cumulative frequency distribution, scale the upper limit of the class along the X-axis
and the cumulative frequencies along the Y-axis. To provide additional information, you can scale the
horizontal axis on the left in units and the vertical axis on the right in percent.
To begin the plotting, 4 vehicles sold for less than 180,000, so the first plot is at X = 180 and Y = 4. The
coordinates for the next plot are X = 190 and Y = 16. The rest of the points are plotted and then the dots
connected to form the chart. To find the selling price below which half the cars sold, we draw a line from
the 90 percent mark on the right-hand vertical axis over the ogive, then drop down to the X-axis and read
the selling price. The value on the X-axis is 240, so we estimate that 90 percent of the vehicles sold for
less than 240,000.

70
60
50
Frequency

40
30
20
10
0
165 175 185 185 205 215 225 235 245
Selling price (in 000)

2.2.3. Other Methods of data presentation

a. Line -Charts
b. Bar -Charts
c. Pie – Charts
The histogram, the frequency polygon, and the cumulative frequency curve all have strong visual appeal.
That is, they are designed to capture the attention of the reader. In this section we will examine some
other graphical forms, namely the line chart, the bar chart, and the pie chart.

a) Line Charts
Line charts: are particularly effective in business because we can show the change in a variable
overtime. The variable, such as the number of units sold or the total value of the sales, is called along the
vertical axis and time along the horizontal axis. The table below shows the line chart for the above data.

14
12
10
8
6
4
2
0
175 185 185 205 215 225 235 245

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b) Bar Chart
Bar Charts: This is used when the horizontal axis deals with information that is qualitative or non –
continuous in nature, e.g. Gender, Marital status, etc. When we represent data using bar charts, the bars
are not joined together. All the bars must have equal width and the distance between bars must be equal.
The following chart shows the bar chart of educational background of managers in a certain company.

Bar Chart of managers’ degree subject

c) Pie – Chart:
Pie – Chart: - is useful for displaying a relative frequency distribution. A circle is divided proportionally
to the relative frequency and portions of the circle are allocated for the different groups. We will use the
information in the following table which shows a breakdown of the educational qualification of
employees at Hawassa University, to explain the details of constructing a pie chart.

Educational Qualifications Percent

PhD 25
MA/MSc 50
BA/BSc 15
Others 10
Total 100

Educational Qualification of Employees

The first step is to record the percentage 0, 5, 10, 15, and so on evenly around the circumference of a
circle. The following chart shows the educational qualification of employees at Hawassa University

10 %
25 % PhD
15 %
MA/MSc
BA/BSc
Other

50 %

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Educational Qualification of Employees

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