Role of Statistics Essay
Role of Statistics
Statistics is the practice of gathering, sorting, and categorizing numerical information in an organized format that can be used to acquire results to specific problems. According to McClave, Benson, and Sincich (2011), “Statistics is the science of data. It involves collecting, classifying, summarizing, organizing, analyzing, and interpreting numerical information” (p. 3). Different Types and Levels of Statistics
There are two types of statistics. One is descriptive which defines the variable being studies by using graphics to display and measure results. The other is inferential which tries to get results beyond the data collected and a probability measurement is needed to justify the outcome. McClave, Benson and Sincich (2011), emphasis that descriptive statistics use numerical and graphical methods to look for patterns in data set and summarize the results. Inferential statistics uses sample data to make estimates and predictions (p. 3). Levels of Statistics
All data are not created equal, some are qualitative and quantitative. Nominal and Ordinal fall under quantitative level and Interval and Ratio comes under qualitative level. The Nominal level is the lowest and data can only be counted or categorized. Ordinal data at this level can be put in order but there is no difference between the data collected. Interval is similar to ordinal except that the order attached to the data collected is important. Ratio is the highest level of measurements. This is similar to the interval level but with a zero value which is essential to making comparisons. Role of Statistics in Business Decision Making
Statistics is used in business decision making to help companies keep their competitive edge and build longevity. Statistical Examples
Statistics can be used to calculate the ratio of Alzheimer patients between men and women of a certain age. HUD uses zip codes to provide special programs for families that will enable them to purchase a home. Businesses use statistics to depict demographics to market their products.
McClave, J. T., Benson, P. G., & Sincich, T. (2011). Statistics for business and economics (11th ed.). Boston, MA: Pearson-Prentice Hall.