1. Chap 19-1
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc.
Statistics
"…our world has three different
forms of lie:
the white lie, telling a lie and … statistics"
Unknown member of the London Royal Scientific Society

2. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-2
“… statistics knows everything…”
Ilf and Petrov, “12 Chairs”
Topic 1. METHODOLOGICAL PRINCIPLES OF
STATISTICS
• The subject and object of statistics
• The categories and concepts in statistics
 STATISTICS + !? = ?

3. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-3
Statistics can be said to have begun in ancient civilization, going back at least to the
5th century BC, but it was not until the 18th century that it started to draw more
heavily from calculus and probability theory. Statistics continues to be an area of
active research, for example on the problem of how to analyze Big data.
The term statistics is ultimately derived from the New Latin statisticum collegium
("council of state") and the Italian word statista ("statesman" or "politician"). The
German Statistik, first introduced by Gottfried Achenwall (1749), originally
designated the analysis of data about the state, signifying the "science of state"
(then called political arithmetic in English). It acquired the meaning of the
collection and classification of data generally in the early 19th century.

4. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-4
Carl Friedrich Gauss, mathematician who developed the method of least
squares in 1809.
The German “statistik”, first introduced by Gottfried Achenwall (1749).
Sir William Petty, a 17th-century economist who used early statistical methods
to analyze demographic data.

5. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-5
The modern statistics:
 It encompasses the collection, presentation
and characterization of information to assist
both data analysis and the decision-making
process
 It studies quantitative side of mass social-
economic phenomena in interconnection with
their quantitative characteristics in specific
conditions of place and time

6. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-6
The global task:
 interconnection the levels of generalization of
statistics data and the organizational structure of
economics ( or the social and economic
problems)

7. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-7
Problem: statistical support for management
decision
 The goal: teach students to understand
the essence of the problem using their
associative thinking and to justify the
correctness of their decisions
 Task: choose methods of data
collection and information processing
for a specific situation

8. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-8
1.1. The subject and object of statistics
 The main idea of Statistics
The simple structure Basic contents
of this discipline
1. economics quantitative method
+
2. mathematics of analysis of
=
3. statistics phenomena or process

9. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-9
In our country and analytical practice
of other countries the contents
of statistics is considered both the
method of accounting and the method of
analysis.
The basic problems of the method
of accounting are data searching,
data collection and levels of measurement.
The basic problems of the method of
analyses are to select a method
for a specific purpose, to explain this result.

10. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-10
Statistics studies the quantitative aspect of mass socio-
economic phenomena and their qualitative characteristics. It
studies their structure and distribution, location in space,
direction and speed of change over time, trends and the
regularities, the density of interconnections and
interdependence.
 The object of this subject is society, phenomena and processes
of public life.
 The subject of statistics is quantitative and qualitative
interconnections of mass phenomena at specific place and
time.

11. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-11
The peculiarities of the subject are:
- the description of a quantitative aspects of these
phenomena taking into account the place and time in
which they occurred,
- the identification and measurement of
regularities of mass phenomena and processes.

12. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-12
1.2. The categories and concepts in statistics
The theoretical basis of statistics includes categories and
concepts of the economic theory.
The law of large numbers – when considering a large
mass of phenomena occasional deviation is not taken into account.
Variables are characteristics of items or individuals and
are what you analyze when you use a statistical method.

13. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-13
Statisticians classify variables as either being categorical or
numerical and further classify numerical variables as having
either discrete or continuous values.
There are four widely recognized levels of
measurement:
nominal,
ordinal,
interval,
ratio scales.
A population consists of all the items or individuals
about which you want to draw a conclusion.
A parameter is a numerical measure that describes a
characteristic of a population.

14. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-14
Types of regularities
Statistical regularity is consistency and
order in mass processes or phenomena.
This consistency manifests itself only in
statistical population.
Types of regularities:
- the regularity of development (dynamics) of
the phenomena;
- the regularity of structural changes;
- the regularity of distribution of population
elements;
- the regularity of phenomena
interdependence.

15. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-15
Statistical population
Statistical population is a certain set
of elements that are combined by
the conditions of their development
and existence.
The peculiarities of the statistical
population are
- qualitative homogeneity,
- the change of a sign within certain
limits.

16. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-16
The homogeneous population
Statistics studies homogeneous population.
The homogeneous population is a population
whose elements have similar properties and
belong to the same type.
For example, the data on employment of
workers and equipment utilization can not be
combined into a single set.

17. Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 19-17
Statisticians will become the heroes of the 21st century
Open Data Institute CEO Gavin Starks