Chapter 1: Introduction to

Statistics

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 1.0 History of Statistics

Origin: Statistics has its origin in Latin word

Status, Italian word Statista and German term
Statistik all of which mean “Political State”. In
ancient times the beginning of Statistics was
made to meet the requirements of State
primarily and hence the name.
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1.1 Definition and classification
of statistics

1.1.1 Definition(Meaning)of Statistics

The term Statistics is generally used in 2 senses:

1.Plural Sense

2. Singular Sense
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 1.Plural Sense
• Under this, Statistics refers to numerical
statement of facts related to any field of
enquiry such as data related to income,
expenditure, population etc.


in the sense of numerical data or
Statistical data.
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 Definitions for Plural sense

Definitions- “Statistics are numerical statements

of facts in any department of enquiry placed in
relation to each other”-Bowley
“By statistics we mean quantitative data affected
to a marked extent by multiplicity of cause”-
Yule and Kendall
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Features in Plural Sense
1. Aggregation of facts- A single number does not
constitute Statistics as no conclusion can be
drawn from it. Only the aggregate of facts
capable of offering meaningful information
constitute Statistics.
2.Numerically expressed- Statistics are expressed
in numbers. Qualitative data like rich, poor,
beautiful, big etc cannot be termed Statistics.
Contd….

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3.Affected by Multiple causes- Statistics is not impacted
by only 1 factor as multitude of factors influence it. For
e.g rise in prices can be attributed to reduction in
supply, increase in demand, rise in input costs etc.
4. Reasonable Accuracy- A reasonable degree of
accuracy must be maintaining while collecting the
statistical data.
5. Placed in relation to each others- Such data is called
Statistics which is mutually related and comparable.
Height of 40 people cannot be compared with age of
40 people as data is not related.
Contd….
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6. Pre-determined purpose- Data collected
without any purpose or randomly will only be
a numerical value and not Statistics.
7. Enumerated or Estimated- Data can either be
collected by estimation (if the field of
investigation is very vast) or enumeration (for
smaller set of data).
8. Collected in systematic manner- Haphazardly
collected data will not provide conclusive
evidence so systematic collection should be
planned beforehand.
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 2. Singular sense
 Under this, Statistics refers to the science in which we deal
with techniques and methods for collecting, organizing,
presenting, analyzing and interpreting numerical data.
 in the meaning of Statistical methods.

Definitions- “Statistics may be defined as the collection,

presentation, analysis and interpretation of numerical
data.”-Croxton and Cowden.

“Statistics is the science which deals with the collection,

classification and tabulation of numerical facts as a basis for
the explanation, description and comparison of phenomena-
Lovitt.
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 Features in singular sense
Given the definitions, the following stages of Statistics
emerge.
1. Collection of data- Decide how, where, when, what
kind of data to be collected.
2. Organization of data- Organize the collected data to
make it comparable and simple.
3. Presentation of data- Make the data intelligible,
brief and attractive.
4. Analysis of data- To draw conclusions, analysis of
data is required by different methods e.g. central
tendency, correlation.
5. Interpretation of data- Comparison and conclusions
in simple and easy language.
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 1.1.2 Classification of Statistics
Statistical methods are classified into two
groups or areas based on how data are used.
These are:
Descriptive Statistics and
Inferential Statistics.

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Descriptive Statistics consists of the collection,
organization, presentation and analysis of
numerical data. It is concerned with describing
certain characteristics of a set of data (usually
a sample) – that is, what it is shaped like, what
number the values tend to cluster (converge)
around, how much variation is present in the
data, and so forth.
 In short, Descriptive Statistics describes the
nature or characteristics of data without
making conclusion or generalization.
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Example : The average age of athletes

participated in London Marathon was 25 years,

80% of the instructors in ASTU are males, The

marks of 50 students in Statistics course are

found to range from 30 to 85, etc. are some

examples of Descriptive Statistics.

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 Inferential Statistics is concerned with the process of
drawing conclusions (inferences) about specific
characteristics of a population based on information
obtained from samples, performing hypothesis testing,
determining relationships among variables, and making
predictions.
Example : The result obtained from the analysis of income
of 100 randomly selected citizens in Ethiopia suggests that
the average perception income of a citizen in Ethiopia is
30 Birr; the average income of all families in Ethiopia can
be estimated from figures obtained from a few hundred
families.
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 1.3 Definition of some basic terms
• Data: The word data was obtained from the singular Latin
word “datum “to mean fact.
• Population: The complete collection of individuals, objects,
or measurements that have a characteristic in common or
totality of related observations in a given study is
described as a population. The population that is being
studied is also called the target population.
Population can be finite (limited in its size) or infinite
(unrestricted).
• Sample: A sub group of the population that will be studied
in detail is called a Sample.
Contd….

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Parameters: are statistical measures obtained from a
population data. These measures may include the mean,
variance, standard deviation, etc. and are denoted by
 , , etc., respectively.
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Sample Statistic: a number computed from a sample data.

Sample Statistics are denoted by lower case letters of the
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alphabet such as x -the sample mean, s - the sample
variance, etc.
Variable: is a characteristic under study that assumes
different values for different elements and most of the time
variables are denoted by the letters X, Y, Z, etc., and their
observed numerical values by x , y , z , etc.
Contd…
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Example : Height, Weight, Age, Income, Expenditure, Grade,
Intelligence, sex, color, etc.
Quantitative Variable: A variable that can be measured
numerically is called a quantitative Variable. The data
collected on a quantitative variable are called quantitative
data.
Discrete Variable: is a variable whose values are countable
such as family size, number of students in a class, etc. Its
values are obtained by counting.
Continuous Variable: is a variable which can, theoretically
assume any numerical value between two given values. The
respective values of such continuous variables are obtained by
measuring such as time taken to complete a certain
examination, height of a person, age of a person, test scores
of a student and so on.
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Qualitative Variable: is variable that cannot assume
a numerical value but can be classified into two or
more nonnumeric categories such as the gender of
a person, the language in which a book is written,
hair color, and so on.
Element or Member: An element or member of a
sample or population is a specific subject or object
(for example, a person, firm, item, state, or country)
about which the information is collected.
Observation or Measurement: The value of a variable
for an element is called an Observation or Measurement.
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Data Set: A data set is a collection of observations
on one or more variables.
Survey: Survey or experiment is a device of obtaining
the desired data.
Sample Frame: A list of the entire population from
which items can be selected to form a sample is
referred to as sample frame.
Census and Sample Survey: A survey that includes
every member of the population is called a census.
The technique of collecting information from a portion
of the population is called a sample survey.
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1.4 Applications, uses and
limitations of statistics

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 Scope Statistics

The scope of Statistics may be classified into following 3 parts-

The study of nature is to find out whether Statistics is Science or Art

Nature As a science- It studies the Statistical data
As an Art- It makes use of data to solve problems of real life.
The subject matter of statistics is divided into 2 parts-
1. Descriptive statistics- It describes the data and consists of methods and
Subject techniques to explain characteristics of data. The methods can either be graphical
Matter or computational.
2. Inferential Statistics- It deals with methods which describe the characteristics of
population or making decisions concerning population on the basis of sample
results. Contd….
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 Scope Statistics
1. Study of Numerical facts-Statistics can only study such facts which can
be expressed in numerical terms.
2. Study of Aggregates only- Statistics studies only the aggregates and not
particular unit. No conclusion is possible from single piece of data.
3. Not the only method- Statistics is not the only method to study and
many a time does not suggest the best solution of each problem.
4. Homogeneity of data- Quantitative data has to be consistent and
homogeneous otherwise it will not be possible to draw conclusions.
5. Results are true only on an average- Statistical results only express
Limitati tendencies and are true on an average and not absolutely.
ons 6. Without reference results may prove wrong- Circumstances and
conditions under which conclusions are made have to be studied
otherwise the results may give wrong impression.
7. Can be used by experts only- Only experts can make good use of
statistics and unqualified would find it difficult to apply it.
8. Misuse of Statistics is possible- The misuse of Statistics to seek particular
results is a possibility, more so when it is not easily understood.

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Functions Statistics
1. Expression of facts in numbers-One of the main function of Statistics is
to express numbers in easily understandable language and interpret the
results with certainty.
2. Simple presentation- Statistics enables presentation of complex data in a
simple format in terms of aggregate, average, percentage, graphs,
diagrams etc.
3. Enlarges individual knowledge and experience- Statistics expands the
horizons of individual knowledge and understanding.
4. It compares facts- It facilitates the comparison of data and identifying
the interrelations between large sets of data for drawing suitable
inferences.
5. Facilitates policy formulation- By doing analysis and interpretation of
data, precise nature of problem can be ascertained thus assisting policy
formulation.
6. It helps other science in testing their laws- Statistics helps other laws for
establishing their assumptions. E.g. Many laws of economics namely law
of demand, law of supply, Keynes theory of employment can be verified
by Statistics.
7. It helps in forecasting- Extrapolating present data aids in forecasting
likely changes that can be expected in future.
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Uses & Importance Statistics
1. Importance for administrators- Administrators use data for varied
purposes and Statistics provide useful tools for decision making support.
2. Importance for business, industry and agriculture- Estimating demand
and supply, studying seasonal changes, understanding trade cycles,
consumer profiling, product life cycle analysis are examples of some of
the functions that Statistics can perform for business, industry and
agriculture.
3. Importance in Economics- Statistics is basis of Economics as it helps
establishing the assumptions. Almost all the economic aggregates are
measured with the help of Statistics.
4. Importance for Politicians and in Social field- For formulating social,
economic, educational, industrial and other policies, politicians draw
great support from Statistics discipline.
Existing social problems can only be brought to fore front with the help
of data analysis. The effectiveness of existing policies for social change
can be measured by statistical tools.
5. Importance for banking and insurance industry- Bankers use statistics for
estimating credit growth, risk analysis, portfolio management and
insurers for establishing appropriate premiums looking at life
expectancies.
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 1.5 Scales(Levels) of measurement
• Measurement can be defined as the assignment
of numbers to objects and events according to
logically acceptable rules. The number system is
highly logical and offers a multiplicity of
possibilities of further logical manipulations.
• A measurement scale should possess the
following attributes to allow for these logical
manipulations .
Contd…
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Magnitude
• Is the quantum or quantity in which the attribute
exists in various instances of the phenomena. It
allows us to tell whether one instance of the
attribute is greater than, less than or equal to
another instance of the attribute.
Example 1.9: If X gets a score of 20 on an
aggressiveness scale and Y a score of 25, we can
Say that Y is more aggressive than X.
Contd…

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Equal intervals
• It denotes that the magnitude of the attribute
represented by a unit of measurement on the
scale is equal regardless of where on the scale
the unit falls.
Example 1.10 A difference in heights between 60
inches and 65 inches is equal to the difference in
height, between 67 inches and 72 inches.
Contd…

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Absolute zero point
• Is a value that indicates zero exists at that point
or nothing at all of the attribute being
measured exists.
For example, a zero weight indicates “no weight”
at all.
• Keeping in mind these three characteristics of
measurements, scales of measurement can be
divided in to four different types.
Contd…

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1. Nominal Scale (Classificatory Scale)
• It refers to the simple classification of objects or items in
to discrete groups which do not bear any magnitude
relationships to one another.
• In the nominal scale of measurement, numbers are used
simply as labels for groups or classes.
Example: If our data set consists of blue, green, and red
items, we may designate blue as 1, green as 2, and red as 3.
In this case, the numbers 1, 2 and 3 stand only for the
category to which a data point belongs.
• “Nominal” stands for “name” of category. The nominal
scale of measurement is used for qualitative rather than
quantitative data: blue, green, red, male, female; marital
status (married, single, divorced, etc.); professional
classification; geographic classification; and so on.

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2. Ordinal Scale or Ranking Scale
• First it is nominal scale and here data elements may
be ordered according to their relative size or quality.
It means that ordinal scale is first of all, nominal but
most people would agree with the order in which the
categories were placed.
• So, in ordinal scale inequalities have a meaning. The
inequality signs ‘<’ or’>’ may assume any meaning
like “stronger than”, “softer than”, “weaker than” etc.
• Ordinal scale reflects only magnitude and does not
possess the attribute of equal intervals or an absolute
zero point.
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Example : Let us consider the set of all diplomas
B.Sc /B.A., and M.Sc. /M.A graduates of a certain
university at the end of a certain academic year.
The graduates could be classified according to
their level of education. It is possible to say “the
M.Sc/M.A graduate is better than the B.Sc. /B.A
Graduate “or to say” the B.Sc./B.A Graduate is
better than the diploma graduate”. Therefore, we
can have meaningful inequalities.
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3. Interval Scale
• The interval scale possesses two out of three
important requirements of good measurement
scale. i.e., magnitude and equal intervals but
lacks the real or absolute zero point.
• An interval scale is one, which provides equal
intervals from an arbitrary origin. An interval
scale not only orders according to the amount of
the attribute they represent, but also establishes
equal intervals between the units of measure.
Equal differences in the numbers represent equal
differences in the attribute being measured.
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Example : The Fahrenheit and centigrade
thermometers are examples of interval scales.
• On an interval scale, both the order and distance
relationships among the numbers have meaning.
We may assert 30 and 31 degrees centigrade
equal to the differences between 40 and 41
degrees centigrade. We could not say, however
50oC is twice as hot as 25oC. This is because there
is no true zero point on an interval scale. Since
zero is arbitrary, multiplication and division of
numbers are not appropriate.
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4. Ratio Scale
• The scale of measurement which has all the
three attributes: magnitude, equal intervals and
an absolute zero point is called a ratio scale.
Addition, subtraction, multiplication and division
of the numbers are appropriate.
Example : - All physical measurements, like height,
weight, area, volume , etc.
- Number of students in various classes.
- Number of books possessed by
students of a class, etc.

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