Unit 1: Graphical and Numerical of Data

Reference: Anderson et al., ch. 1

From 19 /07/2022
Overview • Most successful managers and decision
makers use statistical data for effective
decision making. Economists,
From chapter 1: accountants, financial analysts,
marketers, producers use data. These
• Statistics
days, a buzzword is BIG DATA.
• Data • Big Data is described by four
characteristics: Volume (quantity of
• Scales of measurement stored data), Variety (type and nature),
Velocity (the speed at which data is
• Nominal, ordinal, interval, ratio
generated and processed), and veracity
• Qualitative/Categorical and quantitative data (the quality of the captured data).
Epidemiologists are currently using data
• Cross-sectional and time series data to make sense of the COVID-19
pandemic.
• Descriptive statistics • So you need this stuff and it starts here.
• Process of statistical inference • This section defines the basic terms in
•
statistics for economics.
Objectives
• Understand the meaning of the terms: elements, variables and observations, as

they are used in statistics.

• Understand the difference between qualitative, quantitative, cross-sectional and

time series data.

• Understand the meaning of descriptive statistics and statistical inference.

• Distinguish between a population and a sample.

• Understand the role a sample plays in making statistical inferences about the

population.
Note: when you get to the end of this unit and having attempted suggested questions, come back to this slide and see if the
objectives are met.
 Statistics
• Statistics is the art and science of collecting, analyzing, presenting and
interpreting data

• The social, natural, life and medical sciences are all concerned with the
gathering, organising, summarising and presentation of information.

• Statistics is the “Science of decision making in the face of uncertainty”

• Statistics is used to make informed decisions.

So with this course we are introducing you to the art and science of data use for informed decisions.
How do you gather it? How do you organize it? How do you summarize it? The project component of the
module will give you a platform for hands-on experience.
 Statistics
• Statistics is all about using DATA from the past to extract the INFORMATION we
need to MAKE DECISIONS about the future!

Data Statistical Information Decision

Analysis making

I think you are asking the question: What is/are data?

 Data
• Data are the facts and figures collected, analyzed, and summarized for presentation and
interpretation.
• All the data collected in a given study are referred to as data set for the study.
• Which data sets in South Africa can you think of?
• http://nesstar.statssa.gov.za:8282/webview/
• https://www.datafirst.uct.ac.za/dataportal/index.php/catalog/central
• In a data set we have (1) Elements, (2) Variables and (3) Observations
• Elements are the entities on which data are collected.
• A variable is a characteristic of interest for the elements.
• The set of measurements obtained for a particular element is called an observation.

I am sure you are getting anxious now but also excited. You are imagining these things. Element, variable,
observation – all these describe data – in a data set. Let us make these aspects clearer.
 Data, Data Sets,
Elements, Variables, and Observations
Variables
Putting it into
Element perspective: An
Names Stock Annual Earn/ element like
Exchange Sales(RM) Share(R) LandCare has
Company three variables
(stock exchange
Dataram NQ 73.10 0.86 it belongs to;
its annual sales,
EnergySouth N 74.00 1.67 and its earnings
Keystone N 365.70 0.86 per share) with
observations
LandCare NQ 111.40 0.33
which are NQ,
Psychemedics N 17.60 0.13 111.40 and
0.33.

Data Set
 Scales of measurement
• In statistics, data collections requires one of the following scales of measurement: nominal,
ordinal, interval and ratio.

• These measurement scales are ways to sub-categorize different types of data and
determines the amount of information contained in the data

• The scale indicates the most appropriate data summarization and statistical analyses.

Let us look at these scales one-by-one

 Scales of measurement
• Nominal scale:

• When data for a variable are labels or names used to identify an attribute without
any quantitative value. Using example above, these are NQ or N.

• A non-numeric label or numeric code can be used on a given variable.

• For example, individuals are classified by gender were non-numeric labels
“female” and “male” are used.

• Alternatively, a numeric code can be used for gender were 1 denotes “female”
and 2 denotes “male”. Coding a ‘male’ as a ‘2’ does not make him of more value.

• In my South African data with a variable “Province” I can code the nine provinces
with arbitrary numbers. It does not make one province better than the other.
 Scales of measurement
• Ordinal scale:
• The data have properties of nominal data, but the order or rank of the data is
meaningful.

• A non-numeric label or numeric code can be used on a given variable.

• While the order is important, the differences between the codes is not really
known.

• Example, a student can rate his/her health status using non-numeric labels such
as poor, good or excellent.

• Alternatively, a numeric code can be used: 1 denotes “poor” and 2 denotes

“good” and 3 denotes “excellent”.
 Scales of measurement
• Interval scale:

• The data have properties of ordinal data and the interval between observations is
expressed in terms of a fixed unit of measure.

• Data are always numeric, and we know both the order and the exact differences
between the values.

• An example of an interval data is Celsius temperature where the difference

between each value is the same and zero is an additional data point with other
numbers below it.
Scales of measurement
• Ratio scale:
• The data have all the properties of interval data and the ratio of two values is
meaningful.

• The scale also has an absolute zero that indicates that no numbers exist below
the zero point of the variable.

• Ratio data gives the ultimate–order and variables such as distance, height and
weight use the ratio scale.

• Another example is EECM3724 marks.

 Scales of measurement
• The most appropriate data summarization and statistical analyses to conduct.
Provides Nominal Ordinal Interval Ratio
The “order” of values is known √ √ √
Counts – Frequency of √ √ √ √
distribution
Mode √ √ √ √
Median √ √ √
Mean √ √
Can quantify the difference √ √
between each value
Can add or subtract values √ √
Can multiple and divide values √
Has true zero √

Perhaps when you get data, use this tick box

Qualitative/categorical and quantitative data – another important distinction
• Data can be further classified as either qualitative/categorical or quantitative.

• The statistical analysis appropriate for a particular variable depends upon

whether the variable is qualitative or quantitative.

• There are more alternatives for statistical analysis if the data is quantitative,
while the options are limited if the data is qualitative/categorical.

•
 Qualitative/Categorical Data
• Data labels or names are used to identify an attribute of each element and the data
represent groups.
• Each observation can be placed in only one group, and the groups are mutually exclusive.
• Can either be nominal or ordinal scale of measurement
• Can be non-numeric or numeric.
• Appropriate statistical analyses are limited.
• Categorical often referred to as qualitative data as well
• However, a difference exist between categorical and qualitative data.
• Qualitative data does not take on numeric values and can only be used to describe the
types of categorical data that are nominal.
• We are unable to refer to ordinal data as qualitative as meaningful numeric values can be
assigned to the data.
• Question: Is all qualitative data categorical and is all categorical data qualitative?
• Can you identify examples?
Quantitative data
• It takes numerical values and represent some kind of measurement.

• Always numeric indicating how much or how many.

• It is discrete, if measuring how many and continuous, if measuring how much.

• Ordinary arithmetic operations such as addition, subtraction, multiplication and

division provide meaningful results

•
 Classification of Scales of measurement

Data

Categorical Quantitative

Numeric Non-numeric Numeric

Nominal Ordinal Nominal Ordinal Interval Ratio

• Think of your monthly allowance in South African Rand. Where is it classified?

• What about days as in Monday, Tuesday ………?
 Cross-sectional data & Time series data
Cross-sectional data
• This is data collected at the same or approximately the same point in time.

• So the data comes from different individuals, firms, countries at a single point in time.

• For example, data collected in the 2011 Census.

• Time series data

• This is data collected over several time periods

• The data is collected for the same set of observations

• The data is collected over equally-spaced time intervals.

• Example is the daily closing price of a certain stock recorded over the last six weeks.

We have talked a lot about the classification of data. It is not just about classification. Data has to communicate something to
us. The next slides takes a look at this. It is just highlights. We will cover detail about these issues as the course unfolds.
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.

Statistical inference
• Statistical inference is the process of using data obtained from a sample to make
estimates and test hypotheses about the characteristics of the population.
• We want to draw conclusions about some unknown aspect of a population based
on a random sample from that population.
• A population is the set of all elements of interest in a particular study
• A sample is a subset of the population
• The process of conducting a survey to collect data for the entire population is
called a census.
• The process of conducting a survey to collect data for a sample is called a sample
survey.
• Because census survey are costly, data from sample survey are mostly used.
Process of Statistical Inference
1. Population
consists of all tune- 2. A sample of 50
ups. Average cost of engine tune-ups
parts is unknown. is examined.

3. The sample data

4. The sample average provide a sample
is used to estimate the average parts cost
population average. of $79 per tune-up.
 Descriptive Statistics
methods of organizing,
summarizing and presenting
data in a convenient and
informative way.

Inferential statistics
body of methods used to draw
conclusions or inferences
about characteristics of
populations based on sample
data.
Attempt the exercises at the end of the chapter in your book
Next is:
Unit 1 (continued): Graphical and Numerical of Data