1. 1 1 Slide STATISTICS FOR BUSINESS AND ECONOMICS Seventh Edition AndersonSweeneyWilliams Slides Prepared by John Loucks © 1999 ITP/South-Western College Publishing

2. 2 2 Slide Chapter 1 Data and Statistics n Applications in Business and Economics n Data n Data Sources n Descriptive Statistics n Statistical Inference

3. 3 3 Slide Applications in Business and Economics n Accounting Public accounting firms use statistical sampling procedures when conducting audits for their clients. Public accounting firms use statistical sampling procedures when conducting audits for their clients. n Finance Financial advisors use a variety of statistical information including price-earnings ratios to guide their investment recommendations. Financial advisors use a variety of statistical information including price-earnings ratios to guide their investment recommendations. n Marketing Electronic point-of-sale scanners at retail checkout counters are used to collect data for marketing research applications. Electronic point-of-sale scanners at retail checkout counters are used to collect data for marketing research applications.

4. 4 4 Slide n Production Statistical quality control charts are used to monitor the output of a production process. Statistical quality control charts are used to monitor the output of a production process. n Economics Economists use statistical information in making forecasts about the future of the economy. Economists use statistical information in making forecasts about the future of the economy. Applications in Business and Economics

5. 5 5 Slide Data n Elements, Variables, and Observations n Qualitative and Quantitative Data n Time Series and Cross-Sectional Data

6. 6 6 Slide Elements, Variables, and Observations n Data are the facts and figures collected, analyzed, and summarized for presentation and interpretation. n Together, the data collected in a study are referred to as the data set for the study. n The elements are the entities on which data are collected. n A variable is a characteristic of interest for the elements. n The set of measurements collected for a particular element is called an observation. n The total number of data values in a data set is the number of elements multiplied by the number of variables.

7. 7 7 Slide Qualitative and Quantitative Data n The statistical analysis that is appropriate for a variable depends on whether the data are qualitative or quantitative. n Qualitative data are labels or names used to identify an attribute of each element. n Quantitative data indicate either how much or how many. n Quantitative data are always numeric. n Qualitative data can be either numeric or nonnumeric. n Ordinary arithmetic operations are meaningful only with quantitative data.

8. 8 8 Slide Cross-Sectional and Time Series Data n Cross-sectional data are collected at the same or approximately the same point in time. Example: data detailing the number of building permits issued in June 1998 in each of the counties of Texas Example: data detailing the number of building permits issued in June 1998 in each of the counties of Texas n Time series data are collected over several time periods. Example: data detailing the number of building permits issued in Travis County, Texas in each of the last 36 months Example: data detailing the number of building permits issued in Travis County, Texas in each of the last 36 months

9. 9 9 Slide Data Sources n Existing Sources Data needed for a particular application might already exist within a firm. Data needed for a particular application might already exist within a firm. Business and economic data are available from organizations that specialize in collecting and maintaining data. Business and economic data are available from organizations that specialize in collecting and maintaining data. Government agencies are another important source of data. Government agencies are another important source of data. Data are also available from a variety of industry associations and special-interest organizations. Data are also available from a variety of industry associations and special-interest organizations.

10. 10 Slide Data Sources n Internet The internet is becoming an increasingly important source of data.The internet is becoming an increasingly important source of data. The Bureau of the Census has a wealth of data at its website. (www.census.gov)The Bureau of the Census has a wealth of data at its website. (www.census.gov) Ford Motor Company provides product information at its website. (www.ford.com)Ford Motor Company provides product information at its website. (www.ford.com) St. Edward’s University lists its course catalog on its website. (www.stedwards.edu)St. Edward’s University lists its course catalog on its website. (www.stedwards.edu)

11. 11 Slide n Statistical Studies In experimental studies the variables of interest are first identified. Then one or more factors in the study are controlled so that data can be obtained about how the factors influence the variables. In experimental studies the variables of interest are first identified. Then one or more factors in the study are controlled so that data can be obtained about how the factors influence the variables. In observational (non-experimental) studies no attempt is made to control or influence the variables of interest. In observational (non-experimental) studies no attempt is made to control or influence the variables of interest. A survey is perhaps the most common type of observational study. A survey is perhaps the most common type of observational study. Data Sources

12. 12 Slide Data Acquisition Considerations n Time Requirement Searching for information can be time consuming. Searching for information can be time consuming. Information might no longer be useful by the time it is available. Information might no longer be useful by the time it is available. n Cost of Acquisition Organizations often charge for information even when it is not their primary business activity. Organizations often charge for information even when it is not their primary business activity. n Data Errors Using any data that happens to be available or that were acquired with little care can lead to poor and misleading information. Using any data that happens to be available or that were acquired with little care can lead to poor and misleading information.

13. 13 Slide Descriptive vs. Inferential Statistics n Descriptive statistics are the tabular, graphical, and numerical methods used to summarize data. n Statistical inference is the process of using data obtained from a small group of elements (the sample) to make estimates and test hypotheses about the characteristics of a larger group of elements (the population).

14. 14 Slide The End of Chapter 1