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Descriptive and Inferential Statistics Descriptive Statistics • the Application of Statistical Thinking Involves Two Sets of Processes

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Descriptive and Inferential Statistics Descriptive Statistics • the Application of Statistical Thinking Involves Two Sets of Processes Descriptive and Inferential Statistics Descriptive statistics • The application of statistical thinking involves two sets of processes. oFirst, there is the description and opresentation of data. oenvironment from which the data were selected or oabout the underlying mechanism that generated the data, such as: the ongoing functioning of the economy or the accounting system or production line in a business firm. Descriptive statistics contd. • The first is called descriptive statistics and the second inferential statistics. • Descriptive statistics utilizes numerical and graphical methods to find patterns in the data, to summarize the information it reveals and to Present that information in a meaningful way. Inferential statistics Inferential statistics uses data to make estimates, decisions, predictions, or other generalizations about the environment from which the data were obtained. • Statistical Inference • Statistical inference essentially involves the attempt to acquire information about a population or process by analyzing a sample of elements from that population or process. Population • A population includes the set of units— . usually people, objects, transactions, or events—that we are interested in learning about. For example, we could be interested in the effects of schooling on earnings in later life, in which case the relevant population would be all people working Population contd. • Or we could be interested in how people will vote in the next municipal election in which case the relevant population will be all voters in the municipality. • Or a business might be interested in the nature of bad loans, in which case the relevant population will be the entire set of bad loans on the books at a particular date. Process • A process is a mechanism that produces output. • For example, a business would be interested in the items coming off a particular assembly line that are defective, in which case the process is the flow of production off the assembly line. • An economist might be interested in how the unemployment rate varies with changes in monetary and fiscal policy. Here, the process is the flow of new hires and lay-offs as the economic system grinds along from year to year. Process contd. • Or we might be interested in the effects of drinking on driving, in which case the underlying process is the on-going generation of car accidents as the society goes about its activities. • Note that a process is simply a mechanism which, if it remains intact, eventually produces an infinite population. All voters, all workers and all bad loans on the books can be counted and listed. Sample • A sample is a subset of the units comprising a finite or infinite population. • Because it is costly to examine most finite populations of interest, and impossible to examine the entire output of a process, statisticians use samples from populations and processes to make inferences about their characteristics. • Obviously, our ability to make correct inferences about a finite or infinite population based on a sample of elements from it depends on the sample being representative of the population. What is research? • Research is a careful consideration of study regarding a particular concern or problem using scientific methods. According to the American sociologist Earl Robert Babbie, • “Research is a systematic inquiry to describe, explain, predict, and control the observed phenomenon. Research involves inductive and deductive methods.” Purpose for research • Research is conducted with a purpose to understand: • What do organizations or businesses really want to find out? • What are the processes that need to be followed to chase the idea? • What are the arguments that need to be built around a concept? • What is the evidence that will be required for people to believe in the idea or concept Characteristics of research • A systematic approach must be followed for accurate data. Rules and procedures are an integral part of the process that set the objective. • Researchers need to practice ethics and a code of conduct while making observations or drawing conclusions. • Research is based on logical reasoning and involves both inductive and deductive methods. • The data or knowledge that is derived is in real time from actual observations in natural settings. Characteristics contd. • There is an in-depth analysis of all data collected so that there are no anomalies associated with it. • Research creates a path for generating new questions. Existing data helps create more opportunities for research. • Research is analytical in nature. It makes use of all the available data so that there is no ambiguity in inference. • Accuracy is one of the most important aspects of research. The information that is obtained should be accurate and true to its nature. Inductive and Deductive Research • Inductive research methods are used to analyze an observed event. Deductive methods are used to verify the observed event. • Inductive approaches are associated with qualitative research and deductive methods are more commonly associated with quantitative research..
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