College of Education

School of Continuing and Distance Education 2014/2015 – 2016/2017

ECON 214

Elements of Statistics for

Economists

Session 1 – Introduction to Statistics

Lecturer: Dr. Bernardin Senadza, Dept. of Economics Contact Information: bsenadza@ug.edu.gh

Session Overview

• Statistics is a subject which can be (and is) applied to every aspect of human endeavour, including business and economics.

• This session seeks to introduce students to the definition, importance, and types of statistics.

• At the end of the session, the student will

– Define what is meant by statistics

– Explain what is meant by descriptive statistics and inferential statistics

– Distinguish between a qualitative variable and a quantitative variable

– Distinguish between a discrete variable and a continuous variable

Slide 2

Session Outline

The key topics to be covered in the session are as follows: • What is statistics?

• Why study statistics?

• Types of statistics

• Data and variables

• Sources of data

Slide 3

Reading List

• Michael Barrow, “Statistics for Economics, Accounting and Business Studies”, 4th Edition, Pearson

• R.D. Mason , D.A. Lind, and W.G. Marchal, “Statistical Techniques in Business and Economics”, 10th Edition, McGraw-Hill

Slide 4

WHAT IS STATISTICS? Topic One

Slide 5

WHAT IS STATISTICS?

• There are two definitions of statistics – The first refers to numbers or data

– The second refers to a method of study or an art

• This course is concerned with the second definition even though we shall be making use of data or numbers (the first definition).

• Statistics is the science of collecting, organizing, presenting, analyzing and interpreting data to assist in more effective decisions.

Slide 6

WHY STUDY STATISTICS? Topic Two

Slide 7

WHY STUDY STATISTICS?

• “Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write.” – H.G. Wells.

• Statistical principles can be used to address important issues in science, business, economics as well as questions from daily life.

• Some of the questions statistics can answer are – Do mobile phones cause cancer? – Is the economy growing? – Should I invest my money in stocks or in mutual finds? – Which political party is likely to win the next election?

• Indeed it is impossible for one to function today as a manager without a good foundation in statistics.

Slide 8

TYPES OF STATISTICS Topic Three

Slide 9

TYPES OF STATISTICS

• There are two types of statistics – 1) Descriptive statistics; and 2) Inferential statistics.

• Descriptive statistics refers to methods used to summarize information, which would otherwise be too complex to take in, by means of techniques such as averages and graphs.

• Inferential statistics or statistical inference concerns the relationship between a sample data and the population – That is, drawing conclusions (inference) about a population

based on a sample taken from that population.

Slide 10

TYPES OF STATISTICS

• Population refers to a collection of all the elements (individuals, objects, etc.) that are of interest or belong to a defined group.

• The process of collecting information on all the elements in a defined population is called a census.

• A sample is a subset or a part of the population. • Samples are usually taken to obtain the required

information because it could be very expensive and time consuming to try to obtain complete data concerning the population.

• Sample data is usually obtained through surveys.

Slide 11

TYPES OF STATISTICS CONT’D

• A summary measure for population data is called a (population) parameter.

• A summary measure for sample data is called a (sample) statistic.

• For instance, if we take Ghana as a population, then the average income of Ghanaians is a parameter (population average)

• In the same way, following from the above illustration, if we take Eastern region, then the average income of the region is a statistic (sample average)

Slide 12

DATA AND VARIABLES Topic Four

Slide 13

DATA AND VARIABLES

• Data is a set of measurements or observations taken on a group of objects – For example, we might be interested in taking information on the

age, height, weight and gender of all ECON 214 students enrolled in the Distance programme.

• A variable is a characteristic of an object – Example, height. Note that if we take information on a variable

(such as height), we obtain data

• Data collected on only one variable is called univariate data

• Data collected on more than one variable is called multivariate data Slide 14

DATA AND VARIABLES

• Data can be quantitative or qualitative.

• Quantitative data is numeric (i.e. numbers) in nature. – Example, weight, family income, number of bottles of beer

consumed in a day.

• Qualitative data is non-numeric and describes an attribute of the variable. – Example, gender, religion, marital status.

Slide 15

DATA AND VARIABLES

• Quantitative variables are either discrete or continuous – Discrete variables take on a limited set of distinct values, such

as whole numbers. Example, • Number of children in a family

• Years of school completed

• Number of rooms in a building

– Discrete variables result from counting

– Continuous variables can take on any number/value within a defined range. Example, • Height

• Income

– Typically, continuous variables result from measurement.

Slide 16

DATA AND VARIABLES CONT’D

Slide 17

Qualitative or attribute

(type of car owned)

discrete

(number of children)

continuous

(time taken for an exam)

Quantitative or numerical

DATA

Slide 18

SOURCES OF DATA

• Topic Five

SOURCES OF DATA

• Data can come from various sources; – From records of the firm/organisation (internal) – From sources outside the firm/organisation (external) – These days a lot of data in obtained from the internet

• Often relevant data is not available in the internal records of an organisation or in external published sources and may have to obtained through a survey, especially using a questionnaire.

• A survey may be carried out with respect to an entire population or just a sample.

• Typically, surveys are carried out using a sample for which reason they are usually called sample surveys.

• When a survey is carried out with respect with an entire population it is called a census.

Slide 19

References

• Michael Barrow, “Statistics for Economics, Accounting and Business Studies”, 4th Edition, Pearson

• R.D. Mason , D.A. Lind, and W.G. Marchal, “Statistical Techniques in Business and Economics”, 10th Edition, McGraw-Hill

Slide 20