# Basic Statistics Formulas & Examples
## Introduction
Statistics is the science of collecting, analyzing, interpreting, and presenting
data. Understanding basic statistical concepts and formulas is essential for making
informed decisions in research, business, and everyday life. This guide covers
fundamental statistical measures, formulas, and practical examples to help you
build a solid foundation in statistical analysis.
## Descriptive Statistics
Descriptive statistics summarize and describe the basic features of a dataset. They
provide simple summaries about the sample and measures.
### Measures of Central Tendency
#### 1. Mean (Average)
**Formula:** x? = ?x / n
Where:
- x? = sample mean
- ?x = sum of all values
- n = number of values
**Example:** Find the mean of: 5, 8, 12, 15, 20
- Sum = 5 + 8 + 12 + 15 + 20 = 60
- Mean = 60 � 5 = 12
#### 2. Median
The middle value when data is arranged in order.
**For odd number of values:** Middle value
**For even number of values:** Average of two middle values
**Example:** Find the median of: 3, 7, 9, 12, 15
- Arranged in order: 3, 7, 9, 12, 15
- Median = 9 (middle value)
**Example:** Find the median of: 4, 6, 8, 10
- Median = (6 + 8) � 2 = 7
#### 3. Mode
The value that appears most frequently in the dataset.
**Example:** Find the mode of: 2, 3, 4, 4, 5, 4, 6
- Mode = 4 (appears three times)
### Measures of Variability (Spread)
#### 1. Range
**Formula:** Range = Maximum value - Minimum value
**Example:** For dataset: 10, 15, 20, 25, 30
- Range = 30 - 10 = 20
#### 2. Variance
**Population Variance:** ?� = ?(x - ?)� / N
**Sample Variance:** s� = ?(x - x?)� / (n - 1)
Where:
- ?� = population variance
- s� = sample variance
- ? = population mean
- x? = sample mean
- N = population size
- n = sample size
**Example:** Calculate sample variance for: 4, 6, 8, 10
- Sample mean (x?) = (4 + 6 + 8 + 10) � 4 = 7
- (4-7)� + (6-7)� + (8-7)� + (10-7)� = 9 + 1 + 1 + 9 = 20
- Sample variance = 20 � (4-1) = 20 � 3 = 6.67
#### 3. Standard Deviation
**Population Standard Deviation:** ? = ?(?�)
**Sample Standard Deviation:** s = ?(s�)
**Example:** Using the variance from above:
- Sample standard deviation = ?6.67 = 2.58
#### 4. Coefficient of Variation
**Formula:** CV = (s / x?) � 100%
**Example:** With mean = 7 and standard deviation = 2.58:
- CV = (2.58 / 7) � 100% = 36.9%
## Probability
### Basic Probability
**Formula:** P(A) = Number of favorable outcomes / Total number of possible
outcomes
**Example:** Probability of rolling a 3 on a six-sided die:
- P(3) = 1/6 = 0.167 or 16.7%
### Addition Rule
**For mutually exclusive events:** P(A or B) = P(A) + P(B)
**For non-mutually exclusive events:** P(A or B) = P(A) + P(B) - P(A and B)
### Multiplication Rule
**For independent events:** P(A and B) = P(A) � P(B)
**For dependent events:** P(A and B) = P(A) � P(B|A)
## Normal Distribution
The normal distribution is a bell-shaped curve that is symmetric around the mean.
### Standard Normal Distribution (Z-Score)
**Formula:** z = (x - ?) / ?
Where:
- z = standard score
- x = raw score
- ? = population mean
- ? = population standard deviation
**Example:** If ? = 100, ? = 15, and x = 115:
- z = (115 - 100) / 15 = 1.0
### Empirical Rule (68-95-99.7 Rule)
- Approximately 68% of data falls within 1 standard deviation of the mean
- Approximately 95% of data falls within 2 standard deviations of the mean
- Approximately 99.7% of data falls within 3 standard deviations of the mean
## Confidence Intervals
### Confidence Interval for Population Mean (? known)
**Formula:** x? � z(?/2) � (? / ?n)
Where:
- z(?/2) = critical z-value
- ? = significance level (1 - confidence level)
**Example:** 95% confidence interval with x? = 50, ? = 10, n = 25:
- z(0.025) = 1.96
- Margin of error = 1.96 � (10 / ?25) = 1.96 � 2 = 3.92
- Confidence interval = 50 � 3.92 = (46.08, 53.92)
### Confidence Interval for Population Mean (? unknown)
**Formula:** x? � t(?/2, df) � (s / ?n)
Where:
- t(?/2, df) = critical t-value with df = n - 1 degrees of freedom
## Hypothesis Testing
### One-Sample t-Test
**Formula:** t = (x? - ??) / (s / ?n)
Where:
- ?? = hypothesized population mean
- df = n - 1
**Example:** Test if ? = 20 with x? = 22, s = 5, n = 16:
- t = (22 - 20) / (5 / ?16) = 2 / 1.25 = 1.6
- With df = 15, compare to critical t-value
### Two-Sample t-Test (Independent Samples)
**Formula:** t = (x?? - x??) / ?[(s?�/n?) + (s?�/n?)]
### Chi-Square Test for Independence
**Formula:** ?� = ?[(Observed - Expected)� / Expected]
## Correlation and Regression
### Pearson Correlation Coefficient
**Formula:** r = ?[(x - x?)(y - ?)] / ?[?(x - x?)� � ?(y - ?)�]
Where r ranges from -1 to +1:
- r = 1: Perfect positive correlation
- r = 0: No linear correlation
- r = -1: Perfect negative correlation
### Linear Regression
**Slope:** b? = ?[(x - x?)(y - ?)] / ?(x - x?)�
**Y-intercept:** b? = ? - b?x?
**Regression equation:** ? = b? + b?x
**Example:** Given data points (1,2), (2,4), (3,6), (4,8), (5,10):
- Perfect positive correlation (r = 1)
- Slope = 2, Y-intercept = 0
- Regression equation: ? = 0 + 2x = 2x
## Practical Applications
### Quality Control
- Control charts using mean � 3 standard deviations
- Process capability indices
### Business Analytics
- Customer satisfaction scores
- Sales forecasting using regression analysis
- Market research surveys
### Academic Research
- Comparing group means
- Analyzing survey data
- Testing hypotheses about population parameters
## Common Statistical Software and Tools
### Spreadsheet Applications:
- Microsoft Excel: AVERAGE(), STDEV(), CORREL() functions
- Google Sheets: Built-in statistical functions
### Statistical Software:
- R: Open-source statistical computing
- Python: pandas, scipy.stats, numpy libraries
- SPSS: Commercial statistical package
- SAS: Enterprise statistical software
## Key Concepts to Remember
### When to Use Each Measure:
- **Mean:** Best for symmetric distributions without outliers
- **Median:** Better for skewed distributions or when outliers are present
- **Mode:** Useful for categorical data or finding most common value
### Sample vs. Population:
- Use population formulas when you have data for the entire population
- Use sample formulas when working with a subset of the population
- Sample statistics are used to estimate population parameters
### Assumptions in Statistical Tests:
- Normal distribution assumption for many tests
- Independence of observations
- Equal variances in some tests
- Adequate sample size for reliable results
## Conclusion
Understanding basic statistics is crucial for data-driven decision making. These
formulas and concepts provide the foundation for more advanced statistical
analysis. Practice with real data sets and consider the context of your analysis
when interpreting results. Remember that statistics is not just about
calculations�it's about understanding what the numbers tell us about the world
around us.
Always consider the limitations of your data and the assumptions underlying
statistical tests. When in doubt, consult with a statistician or use statistical
software to verify your calculations and interpretations.
