Data and Statistics

Learning Objectives

1.Obtain an appreciation for the breadth of statistical applications in business and economics.

2.Understand the meaning of the terms elements, variables, and observations as they are used in statistics.

3.Obtain an understanding of the difference between categorical, quantitative, crossectional and time series data.

4.Learn about the sources of data for statistical analysis both internal and external to the firm.

5.Be aware of how errors can arise in data.

6.Know the meaning of descriptive statistics and statistical inference.

7.Be able to distinguish between a population and a sample.

8.Understand the role a sample plays in making statistical inferences about the population.

9.Know the meaning of the term data mining.

10.Be aware of ethical guidelines for statistical practice.

Solutions:

1.Statistics can be referred to as numerical facts. In a broader sense, statistics is the field of study dealing with the collection, analysis, presentation and interpretation of data.

2.a.The ten elements are the ten cars

b.5 variables: Size, Cylinders, City MPG, Highway MPG, and Fuel

c.Categorical variables: Size and Fuel

Quantitative variables: Cylinders, City MPG, and Highway MPG

d.

Variable| Measurement Scale|

Size| Ordinal|

Cylinders| Ratio|

City MPG| Ratio|

Highway MPG| Ratio|

Fuel | Nominal|

3.a.Average mpg for city driving = 182/10 = 18.2 mpg

b.Average mpg for highway driving = 261/10 = 26.1 mpg

On average, the miles per gallon for highway driving is 26.1 – 18.2 = 7.9 mpg greater compared to city driving.

c.3 of 10 or 30% have four cylinder engines

d.6 of 10 or 60% use regular fuel

4.a.The seven elements are the seven schools shown

b.5 variables: State, Campus Setting, Endowment, Applicants Admitted, and NCAA Division

c.Categorical variables: State, Campus Setting, and NCAA Division

Quantitative variables: Endowment and Applicants Admitted

5.a.Average endowment = 74.6/7 = $10.657 billion

b.Average percentage admitted = 111/7 = 15.86%

c.3 of 7 or 42.9% have NCAA Division III varsity teams

d.3 of 7 or 42.9% have a City: Midsize campus setting

6.a.Quantitative

b.Categorical

c.Categorical

d.Quantitative

e.Categorical

7.a.Although the data are recorded as numbers, the numbers are codes for the ratings of Fair (1), Average (2), Good (3) and Excellent (4). Thus the variables are categorical with each data value corresponding to a rating category for the variable.

b.The data may also be ranked in order of the quality. A higher number indicates a higher rating on a scale from Fair (1) to Excellent (4). Since the data can be ranked or ordered, the scale of measurement is...