Statistics is commonly known as a tool used to make decisions, but the official definition of statistics, according to the textbook, is “The science of collecting, organizing, presenting, analyzing, and interpreting data to assist in making more effective decisions.” (Lind, Marchal, & Wathen, 2011) There are two types of statistics, descriptive, and inferential. Descriptive statistics provide information that can be used to show changes such as growth or decline in the area of study. Inferential statistics provide information about a specific topic of study by gathering information from samples.
The science of statistics is also divided into levels, depending on certain characteristics of the information being analyzed. The first level is called nominal and contains data that is simply counted by category, such as the number of red cars on a car lot, or how many boys or girls are in a classroom. Another level is called ordinal. Ordinal data includes data that can be ranked in a certain order such as satisfactory ratings and championship rankings. The next level in statistics is called interval. Interval level not only ranks the data, but reflects a measurable difference between values. An example of this could be average inches of rainfall. The final level of statistics is called ratio. Ratio level includes data that is ranked, reflects a measurable difference between values, and also assigns a meaningful value to zero. An example of ratio data could be the number of positions filled in a company.
Statistics is used for everything from estimating highway/bridge traffic to determine structural safety, to percentage of growth in population to determine adequate classroom space in schools, to the average units of water used per household to establish monthly water rates. Statistics, used formally and informally, affects nearly every aspect of our lives.
Lind, D. A., Marchal, W. G., & Wathen, S. A. (2011). Basic Statistics for Business and Economics (7th ed.). New York, NY: McGraw-Hill/Irwin.
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