Because learning changes everything.
Chapter One
The Nature of
Probability and Statistics
Section 1
Descriptive and Inferential Statistics
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
Learning Objectives
• Demonstrate knowledge of
statistical terms.
• Differentiate between the two
branches of statistics.
© McGraw Hill LLC Monkey Business Images/Shutterstock 2
What is Statistics?
Statistics is the science of conducting studies to
• collect,
• organize,
• summarize,
• analyze, and.
• draw conclusions from data.
In this section we will learn:
• The different branches of statistics.
• What are data.
© McGraw Hill LLC 3
Variables and Data
A variable is a characteristic or attribute that can assume
different values.
The values that a variable can assume are called data. A
collection of data is a data set, and each individual value
is called a data value or datum.
A variable whose values are determined by chance are
called random variables.
• An insurance company studies its records over the past
several years (data) and determines that, on average, 3 out
of every 100 automobiles insured were involved in
accidents in a 1-year period. There is no way to predict the
specific automobiles that will have accidents. The number
of accidents in one year is a random variable.
© McGraw Hill LLC 4
Populations
A population consists of all subjects (human or otherwise)
that are being studied.
• When data is collected from every subject in the population, it
is called a census.
• The United States conducts a census every ten years as
mandated in the Constitution, but it is a time-consuming and
expensive process.
• Most of the time, it is not possible to use the entire population
for a statistical study, therefore, researchers use samples.
© McGraw Hill LLC 5
Samples
• A sample is a group of subjects selected from a population.
• If the subjects in the sample are properly selected, they will be
representative of the population as a whole. This way,
studying the sample helps us learn about the population of
interest.
• If the subjects are not well selected, the sample will be biased
because the subjects in the sample are not representative of
the population as a whole.
• We will study how to properly select a sample in Section 1-3.
© McGraw Hill LLC 6
Descriptive Statistics
Descriptive statistics consists of the collection,
organization, summarization, and presentation of data.
• The census is an example of descriptive statistics. Data are
collected from everyone in the United States, from which
average ages, household sizes, and other demographic
information is determined.
• This information is presented in tables of values, but also in
charts and graphs, in order to effectively summarize and
present the information.
© McGraw Hill LLC 7
Inferential Statistics
Inferential statistics consists of generalizing from samples
to populations, performing estimations and hypothesis
tests, determining relationships among variables, and
making predictions.
• After taking a sample, descriptive statistics is done to
summarize and present the data collected about the sample.
However, the goal of taking a sample is to draw conclusions
about the population as a whole.
In order to effectively make these inferences, we must
understand probability, the chance of an event occurring.
For example, suppose we are testing light bulbs for defects,
and 3 out of the 10 we sample are defective. How likely is
that to happen if the light bulbs are generally non-defective?
© McGraw Hill LLC 8
Hypothesis Testing
Hypothesis testing is a process for evaluating claims
about a population, based on information obtained from a
sample.
• When we tested the lightbulbs before, we may have assumed
that 1% of all lightbulbs are defective, due to chance.
However, 30% of the lightbulbs in our sample were defective!
Hypothesis testing gives us a rigorous way to determine if we
can conclude that the manufacturing process needs adjusting,
based on this information.
Statistics can also be used to find relationships between
variables. For example, there is a relationship between the
heights of parents and the heights of children: taller parents
have taller children.
© McGraw Hill LLC 9
Descriptive or Inferential?
A pharmaceutical company wants to test a new drug to
prevent heart attacks. They, in cooperation with a local
hospital, find 300 people with heart disease, give half of
them the new drug, and give the other half a placebo (a
substance with no medical benefit or harm). 50 of the
people who received the new drug had a heart attack in a
6-month period, versus 90 of the people who received the
placebo.
• “The new drug prevented almost 50% of heart attacks in the
sample” is descriptive statistics. The rate of heart attacks
among people who got the new drug was 5/9 the rate among
people who didn’t.
• “The new drug reduces the risk of heart attacks by 50%” is
inferential statistics. It is generalizing the result from the
sample to make a conclusion about the population.
© McGraw Hill LLC 10
Because learning changes everything. ®
www.mheducation.com
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
