Chapter 1

Data and Statistics

Dr. Matthew Olmstead
BUSI 2305 – Fall 2022
Statistics and Real-Life
Application
• Look at the examples that the book shows of statements used
in newspapers and magazines in chapter 1:
• All of these are called statistics. Statistics refers to the
numerical facts such as averages, medians, percentages and
maximums that can help us understand a variety of business
and economic situations
• Statistics is an art and science of collecting, analyzing,
presenting and interpreting data
• Enables us to make more informed and better decisions

• “If you don’t measure it, you won’t approve

it” - Henry Ford
Applications in Business and
Economics - Finance
• Financial Analysis use a variety of statistical information to
guide their investment recommendations.
• For example, analysis review ratios, dividend yields and
price/earning in relation to stocks.
• For example, if an analysis is comparing a S&P 500 company
and its stock, he/she may compare how that stock has
performed against the S&P as a whole. If the yield
outperforms the S&P, it may be a good investment. If you have
ever bought or traded stocks, many stocks have a buy, sell or
hold marker attached to them. This is determined by
statistical data you may or may not be able to see from your
position.
Applications in Business and
Economics - Accounting
• Public Accounting firms use statistical sampling
procedures when conducting audits for their clients
• Sometimes data size is too large to sample it all and
as a result, so they observe or audit a subset or
“sample” (read notes).
• Note that in statistics, your sample would be
denoted as, n. Your population (the larger group)
would be N.
 Determining
Stock Yield
If a stock’s share price was $50 and has
an annualized dividend of $1.00, its yield
would be 2%. When the .02 is put into
percentage terms it would make a 2%
yield.
Dividend Yield = Dividend income/ Stock
Investment ($1.00 / $50) = 2
Another way to look at is that the cheaper
the stock and higher the dividend, the
larger your yield will be.
Example = Stock A $20 per share and
has a $1 dividend
$1 / $20 = .05 = 5% dividend
Applications in Business and
Economics - Marketing
• Electronic point of sale (POS) scanners at retail checkout
counters college data for a variety of marketing research
applications
• Brand managers can review the scanner statistics and the
promotional activity statistics to gain a better understanding of
the relationship between promotional activities and sales. (See
notes)
Applications in Business and
Economics - Production
• Quality and Quality control is the focus
• Output of production process is the key
Applications in Business and
Economics - Economics
• Using statistical information to make forecasts about
the economy
• Inflation Rates
• Producer Price Index
• Unemployment Rate
• Housing Market
Applications in Business and
Economics – Information
Systems
• Day to day operations of an organization’s computer
network
• Local Area Networks (LANS)
• Wide Area Networks (WANs)
• Intranets
• Statistics such as the number of users on a system,
system up and down time, and bandwidth utilization
may be usesd.
What are data
• Fun fact, data are plural. It’s not “the” data it’s
“these” data.
• Data are the facts and figures collected, analyzed
and summarized for presentation and
interpretation .
• The data set is all the data collected in a particular
study (e.g., assignment 1 spreadsheet).
• Another way to look at data set is the collection of
all data in a study or spreadsheet.
Elements, Variables and
Observations
• Elements are the entities on which data are collected. In
table 1.1 in your book, the elements are the nations.
• The variable is a characteristic of interest for the elements.
In the example in table 1.1 there are 5 variables
• WTO Status
• Per Capital GDP
• Trade Deficit
• Fitch Outlook

• Measures collected on each variable for every element in a

study provide the data. The set of measurements obtained for
a particular element is called an observation.
Example
Scales of Measurement
• You will need to know these 4 scales of measurement
• NOMINAL
• ORDINAL
• INTERVAL
• RATIO

• The scale determines the amount of information

contained in the data and indicates the most appropriate
data summarization and statistical analysis
NOMINAL Measurement
• Used for labeling variables with NO quantitative value
• Could be called “labels”
• Way to remember: “nominal” sounds a lot like “name” and
nominal scales are kind of like “names” or labels.
• Below are examples of Nominal Measurements
ORDINAL Measurement
• Order or rank of data is important
• Example could be Freshman, Sophomore, Junior and Senior
• There could be numerical rank assigned Freshman (1)
Sophomore (2), Junior (3), Senior (4)
• Good, Neutral, Bad
INTERVAL Measurement
• Scales in which the order and value are known
• Example: Celsius temperature because the
difference between each value is the same. For
example, the difference between 60 and 50
degrees is a measurable 10 degrees, as is the
difference between 80 and 70 degrees.
• Example: Differences in SAT Scores. John
score a 1100 on his SAT while Sally scored a
1050. The difference is a measurable 50 points.
Ratio Measurement
Ratio scale
• Data have all the properties of interval data and
the ratio of two values is meaningful.
• Ratio data are always numerical.
• Zero value is included in the scale.

Example:
Price of a book at a retail store is $200, while the
price of the same book sold online is $100. The
ratio property shows that retail stores charge twice
the online price.
Categorical and Quantitative
Data
• Data that can be grouped into specific categories.
For example if the class has 15 males and 12
females, this would be categorical data. Although
there is a numerical value, the class of male or
females bring meaning to the data.
• Categorical is either nominal or ordinal
• Data that uses numerical values to indicate how
much or how many are referred to as quantitative
data. Used by obtaining interval or ratio scale of
measurement
Cross Sectional Data
• Data that is collected at the same or approximately
the same point in time
• For example, if you were comparing the price of 3
different stocks at the same time each year, this
would be cross sectional data.
• Another example may be if you were comparing
population of 5 different countries at the same point
in time.
Time Series Data
• Data collected over several periods.
• The following picture of SIRI stock (www.yahoofinance.com)
shows time series data
Time Series Data Continued
• Useful in Business and Economics in helping identify
trends, what has happened in the past and
potentially future trends
• Typically, pretty easy to understand
• In Accounting balance sheets or other incomes
statements may be reviewed and are good examples
of time series data.
DATA Sources
• Data can be obtained from either existing sources or from
surveys and experimental studies
• Existing Archival Data Sources – This could be from an
already existing database about employees or operations.
Routinely information obtained by HR may go into an existing
data. Data such as addresses, phone numbers, etc. may
already be obtained. In quantitative research, often, archival
data is used for analysis. These are data that already exists
somewhere.
• Customer databases are also a common existing database
(such as vendors for billing and ordering).
Observational Data
Statistical Studies – Observational
• In observational (nonexperimental) studies no attempt is made to
control or influence the variables of interest. In other words, the
dependent variable is not being controlled.
• Example - Studies of smokers and nonsmokers are observational
studies because researchers do not determine or control who will
smoke and who will not smoke.
Data Sources
• Statistical Studies– We’ve all had to fill our surveys for one
reason or another. The main goal of a survey is the collection
of data. Can be classified as experimental or observational.
• Experimental – Variable of Interest is first identified. Then one or
multiple variables are identified to determine how they interact
with one another. If a companies has Blood Pressure in mind, they
may change drug levels to see how the changes affect the main
variable, Blood Pressure. Thus, we often hear the phrase
“experimental drug” because it’s being tested or going through
some sort of study.
• Observational – There is no need or desire to control variables.
• Surveys are a good example of observational
Descriptive Statistics
• These are the numbers that are used to describe the
data that has been collected
• In research, descriptive statistics can be the number of
subjects/participants, Mean, Standard deviation, etc.
Please review to Word Table in Assignment
• Descriptive statistics are typically summarized in
graphs, tables, etc.
• Most common is the Mean (average or central
tendency)
• Know how to find Mean in Odd and Even number sets
Statistical Inference
• When we draw conclusions about the data collected, this is
statistical inference.
• These are estimates and Test hypothesis about the
characteristics of a sample population. Later we will discuss
the alternate and null hypothesis
• To make a statistical Inference, one might study data, the
outcome of data and make a hypothesis about a the study that
was conducted.
• For example, average lifespan of how long a battery might last
or a light bulb might burn would be done by studying data and
making a statistical inference.
Data Mining
• Deals with methods for developing useful decision-making
information from large databases.
• Analysts “mine the data” in the data warehouse, giving it the
name data mining.
• You may have heard the phrase “data driven” before. This
deals with taking data from the database and making data
minded decision. For example, you may have a room
utilization database that show how often your conference
rooms are used. From this bigger database you can sort data
to determine which rooms are used more frequently. This may
help you support budgetary decisions to buy additional
resources for these rooms.