Lecture 7 - MGCR 271 Business Statistics Collecting Data...

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MGCR 271 Business Statistics Ramnath Vaidyanathan Collecting Data Chapter 3
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Motivation: Collecting Data 1. Census: Every entity in a population 2. Survey: Subset of entities from a population 3. Experiment: Controlled study to understand cause- and-effect relationships 4. Observational Study:
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Obtaining data Available data are data that were produced in the past for some other purpose but that may help answer a present question inexpensively. The library and the Internet are sources of available data. Government statistical offices are the primary source for demographic, economic, and social data US: www.fedstats.gov Canada: http://www.statcan.ca Beware of drawing conclusions from our own experience or hearsay. Anecdotal evidence is based on haphazardly selected individual cases, which we tend to remember because they are unusual in some way. They also may not be representative of any larger group of cases. Some questions require data produced specifically to answer them. This leads to designing observational or experimental studies.
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Observation and Experiment Observational study : Record data on individuals without attempting to influence the responses. Example : Watch the behavior of consumers looking at store displays, or the interaction between managers and employees. Experimental study : Deliberately impose a treatment on individuals and record their responses. Influential factors can be controlled. Example : To answer the question “Which TV ad will sell more toothpaste?” show each ad to a separate group of consumers and note whether they buy toothpaste.
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Observational studies vs. Experiments Observational studies are essential sources of data on a variety of topics. However, when our goal is to understand cause and effect , experiments are the only source of fully convincing data. Two variables are confounded when their effects on a response variable cannot be distinguished from each other. Example : If we simply observe cell phone use and brain cancer, any effect of radiation on the occurrence of brain cancer is confounded with lurking variables such as age, occupation, and place of residence Well designed experiments take steps to defeat confounding.
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Sample : The part of the population we actually examine and for which we do have data. How well the sample represents the population depends on the sample design. A s tatistic is a number describing a characteristic of a s ample. Population : The entire group of individuals in which we are interested but can’t usually assess directly. Example: All humans, all working-age people in California, all crickets A p arameter is a number describing a characteristic of the p opulation. Population
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Lecture 7 - MGCR 271 Business Statistics Collecting Data...

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