1. Chapter 1 What Is Statistics? Basic Statistics
for Business and Economics
Fifth Edition
Chapter 1
What Is Statistics?
Douglas William Samuel
Irwin/McGraw-Hill 1 1 1 2 1 1

2. Topics Covered Why we study statistics? Statistics definition.
Qualitative and quantitative variables
Discrete and continuous variables
Nominal, ordinal, interval, and ratio levels of measurements.
Mutually exclusive and exhaustive. 2 2 2 2 3 2

3. Why we study statistics?
Why is statistics required in so many majors?
1- Numerical information is everywhere. Examples: the average salary of new college graduates in UAE is 40,000 dirham. Abu Dhabi Islamic bank holds 7.3 percent of the Islamic banking Industry.

4. Why we study statistics?
2- Statistical techniques are used to make decisions that affect our daily lives.
Examples: Insurance companies use statistical analysis to set rates for homes, automobile, life, and health insurance. Medical researches, environmental protection agencies and others use statistical analysis.

5. Why we study statistics?
3- The knowledge of statistical methods will help you understand how decisions are made and give you a better understanding of how they affect you.
Determine if the existing information is adequate or not.
Gather additional information
Summarize and analyze the available information
Draw conclusions and make contingency plans.

6. Statistics definition
Statistics; is a collection of numerical information.
Statistics : The science of collecting, organizing, presenting, analyzing, and interpreting data to assist in making more effective decisions.
The first step starts by collecting data, then organize and present the data, may be in graph or chart, in order to analyze and interpret it.

7. Types of Statistics Tow types of statistics; 1- Descriptive Statistics
Methods of organizing, summarizing, and presenting data in an informative way.
Example: UAE government reports the population of the country was 1.4 million in 1985, 2.4 million in 1995, and 4.5 million in Figure 1
If we said that the population of the country in 2010 would be 6 million, then the statistics will not be descriptive, because the descriptive statistics should be summarizing the past information.

8. Descriptive statistics
millions
year
Figure 1
UAE Population

9. Types of Statistics Tow types of statistics; 2- Inferential Statistics
The methods used to determine something about a population on the basis of sample. A population an entire set of individuals or objects of interest. A sample is a portion or a part of population.
Example; recent study suggests that a survey of 1000 individuals ( sample), who read the newspaper in the country (population). Figure 2
26% of them buy Gulf news.
24% buy Al Ittihad news.
29% Alkhaleej news.
21% other newspapers.

10. Inferential Statistics
21%%
Other
Newspapers
26%
Golf news
29%
Al khaleej news
24%
Ittihad news
Figure 2

11. Types of Variables Two types of Variables
1- Qualitative or an attribute; nonnumeric
Example; gender, religion, nationality…
2- Quantitative; numeric
Example; balance in your checking account ( answer may be 10,000 dirham).
Quantitative variables are two categories;
(a) Discrete ; result from counting. We have 27 students in section A, and 26 students in section B
(b) Continuous; result from measuring. The duration of flight from Dubai to Bahrain is about one to two hours.

12. Levels of Measurement
Data can be classified according to levels of measurement. The level of measurement of the data often dictates the calculations that can be done to summarize and present data. It will also determine the statistical tests that should be performed.
Four level of measurements;
1- Nominal- level data
2- Ordinal- level data
3- Interval- level data
4- Ratio-level data

13. Levels of Measurement Four level of measurements;
1- Nominal- level data
Qualitative variable that can be classified and counted
Example; World oil supply by country or region
Country/region
USA
Persian gulf
OAPEC
OPEC
Millions of Barrels
Per day
9.05
18.84
19.5
28.00
75.39
Percent 12 25 26 37
100

14. Levels of Measurement Four level of measurements;
1- Nominal- level data
- Data are mutually exclusive ; should fit only in one category, as you can’t produce particular barrel of oil in the US and the Persian Gulf region in the same time. And Exhaustive ;means every member must appear in one of the categories.
- Data categories have no logical order, means you can start with any country or region.

15. Levels of Measurement Four level of measurements;
2- Ordinal- level data
- The data classifications are mutually exclusive and exhaustive
- Data classifications are ranked
Example; Rating of a finance professor
Rating
Superior
Good
Average
Poor
Inferior
Frequency 6 28 25 12 3

16. Levels of Measurement Four level of measurements;
3- Interval- level data
- Data are mutually exclusive and Exhaustive ;
- Data classifications are ranked
- Equal differences in the characteristics are represented by equal differences in the measurements.
Example; Suppose the high temperature on three consecutive winter days in Dubai are 23,26,and 15 degrees. The three temperature can be ranked. Zero degree does not mean no heat, but it’s cold.

17. Levels of Measurement Four level of measurements; 4- Ratio- level data
Quantitative data are the ratio level of measurement
It includes Interval-level , but in addition zero point is meaningful.
- Data are mutually exclusive and Exhaustive ;
- Data classifications are ranked
- Equal differences in the characteristics are represented by equal differences in the measurements.
- The zero point is the absence of characteristics.

18. Levels of Measurement Four level of measurements; 4- Ratio- level data
Example; wages, changes in stock prices. So if you have zero dollar, it means that you have no money
If you have to travel 30 Kilo’s to get to the Institution and I have to travel 60 kilo’s to get to the same place, then the ratio is 2/1, if you convert the kilometers to miles the distance will stay the same.

19. Statistics, Graphics and ethics
Abuses of statistics mislead the reader by emphasizing data that are support their position. Also charts and graphs can also misleading if they are not drawn appropriately.
There are many associations set code of ethics and guidelines when we use statistics.