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Business Statistics

Home | Whitty's MBA Home | Introduction To Statistics | Descriptive Statistics and Graphical Analysis | Measures of Central Tendency | Probability and the Normal Distribution | A Statistical Review | Confidence Intervals and Sample Size | Hypothesis Testing | More Hypothesis Testing | Confidence and Testing Review | Stats Websites Links
A Statistical Review

Applied Business Probability and Statistics

 

A Statistical Review

          Review what has been covered

Introduction

Avoid these common mistakes in statistical analysis:

          Using non-representative data

          Using the wrong tool or using the right tool incorrectly

          Using the right tool incorrectly

          Misinterpreting results

Graphical Analysis

One of the best methods for quickly assessing trends in data is to view data in a graphical representation. The distribution of data is described statistically using two characteristics, both of which are necessary in evaluating data. Central tendency indicates the middle of the data distribution, whether that refers to the mean, mode, or median of the distribution. The dispersion of the distribution of data describes the amount of spread or variation in the data.

The Normal Distribution

The Normal Probability Distribution allows us to put everything on the same scale. The Normal curve is a bell-shaped curve that peaks in the middle at the mean. The Standard Normal curve has a mean of zero. Units on the standard normal curve are measured in terms of the standard deviations; one standard deviation in both directions from the mean captures 68% of the data, two standard deviations in both directions captures 95% of the data, and three standard deviations in both directions captures 99.7% of the data. As expected, the bulk of the data is close to the mean

Words to Know

          Mean (population = m, sample = ) – the average value of the observations

          Median – the middle observation; the point that is greater than half the data and less than the other half of the data

          Mode – the most frequently occurring value

          Range – the difference between the highest value and lowest value in a data set

          Standard Deviation – the average weighted distance of data points from the mean

          Interquartile Range – the difference between the upper quartile and the lower quartile

          Probability – Mathematically, probability equals the number of events meeting the specified condition divided by the number of possibilities

Conclusion

It is important not to blindly accept the results of a statistical analysis. Contradictions to historically well-supported hypotheses need to be carefully considered and investigated. Look at data intelligently. Identify the source of the data and always ask if the data and the results of an analysis make sense. Follow some basic thinking about statistical analysis: beware of incorrect analyses, do not jump to conclusions, and perhaps most importantly, check the math!

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