Lecture1-2

# Lecture1-2 - BUAD 310 Applied Business Statistics Data...

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BUAD 310 Applied Business Statistics 1/13/10

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Data Consists of values of some variables measured or observed for some individuals . E.g., the data set from the class survey (14 variables for the students in our class). Variable is a characteristic of an individual. Qualitative or Categorical : places an individual into one of several groups or categories (finitely many possible) Quantitative : measurements represent quantities, e.g. “how many” (infinitely many possible) 2
Scales of Measurement Ratio variable Quantitative scale (almost all) Ratios meaningful, inherently defined zero ( e.g., salary, weight, distance ) Interval variable Quantitative scale (very few) Ratios not meaningful, no inherently defined zero ( e.g., temperature ) Ordinal variable Qualitative (Categorical) scale Meaningful ordering or ranking of categories ( e.g., class ) Nominative variable Qualitative (Categorical) scale No meaningful ordering or ranking of categories ( e.g., gender, color ) 3

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Data Analysis Initial examination of the data is called Exploratory Data Analysis (EDA). Strategy for EDA: Begin by examining each variable and then move on to the study of relationships At each stage start with graphs and then add numerical summaries 4
Distribution of a Variable Describes what possible values the variable takes and how frequently it takes those values. We describe the overall pattern of a distribution by its shape, center, and spread. There are many ways to describe and display distributions. Graphs Word descriptions Numerical measures 5

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Qualitative (Categorical) Variables The values of a categorical variable are the labels for the categories. The distribution of a categorical variable is described by either the count or the percent of individuals who fall in each category. E.g., data on young American adults from the 1999 Current Population Survey 6 Education Count (millions) Percent Less than high school 4.7 12.3 High school graduate 11.8 30.7 Some college 10.9 28.3 Bachelor’s degree 8.5 22.1 Advanced degree 2.5 6.6
Graphs for Categorical Variables Bar chart: the height of each bar is proportional to the count (or percent) in each category. 7

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Graphs for Categorical Variables The proportion (as percent) of all cars sold in the United States by different manufacturers, 1970 versus 1997 8
Graphs for Categorical Variables Pie chart: the area of each piece is proportional to the percent of individuals in each category 9

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Lecture1-2 - BUAD 310 Applied Business Statistics Data...

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