1.1 Nature of Statistics

The term “Statistics” came from the Latin word ‘status’ which could be translated as ‘state’. The usage of this term only became popular during the 18 th century where they defined Statistics as “the science of dealing with data about the condition of a state or community”. The practice of statistics could be traced back even from the early biblical times where they gather figures related to governance of the state for they realized the importance of these figures in governing the people. Even until today, worldwide, governments have intensified their data gathering and even widen the scope of their numerical figures due to the rise of more cost-efficient methods for collecting data. Some of the most popular figures that are being released by almost all countries are Gross National Product (GNP), Birth rates, Mortality Rates, Unemployment Rate, Literacy Rates and Foreign Currency Exchange Rates. Also, the use of Statistics is not limited to government use only. Right now, almost all business sectors and fields of study use statistics. Statistics serves as the guiding principle in their decision making and helps them come up with sound actions as supported by the analysis done in their available information. Indicated below are some of the uses of Statistics in various fields: Medicine: Medical Researchers use statistics in testing the feasibility or even the efficacy of newly developed drugs. Statistics is also used to understand the spread of the disease and study their prevention, diagnosis, prognosis and treatment (Epidemiology).

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Economics: Statistics aids Economists analyze international and local markets by estimating some Key Performance Indicators (KPI) such as unemployment rate, GNP/GDP, amount of exports and imports. It is also used to forecast economic fluctuations and trends. Market Research: derives statistics by conducting surveys and coming up decisions from these statistics through feasibility studies or for testing the marketability of a new product. Manufacturing: use statistics to assure the quality of their products through the use of sampling and testing some of their outputs Accounting/Auditing: uses sampling techniques in statistics to examine and check their financial books. Education: Educators use statistical methods to determine the validity and reliability of their testing procedures and evaluating the performance of teachers and students.

1.2 Basic Concepts

We normally hear the word “statistics” when people are talking about basketball or the vital statistics of beauty contestants. In this context the word “statistics” is used in the plural form which simply means a numerical figure. But the field of Statistics is not only limited to these simple figures and archiving them. In the context of this course, the definition of “Statistics” is mainly about the study of the theory and applications of the scientific methods dealing all about the data and making sound decisions on this.

Statistics is the branch of science that deals with the collection, presentation, organization, analysis and interpretation of data.

Sometimes, gathering the entire collection of elements is very tedious, expensive or even timeconsuming. Because of this data gatherers sometimes resort to collecting just a portion of the entire collection of elements. The term coined for the entire collection of elements is called Population while the subset of the population is referred as the Sample.

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Population is the collection of all elements under consideration in a statistical inquiry while the sample is a subset of a population.

THINK: Could you say that the entire population is also a sample? The specification of the population of interest depends upon the scope of the study. Let’s say that if we wish to know the average expenditure of all households in Metro Manila, then the population of interest is the...