Running Head: STATISTICS

Statistics
John Hughes
BUS 308 Statistics for Managers
Anup Sreedharan
17 November 2015

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Statistics
In todays world we hear statistics almost constantly. These numbers are often used to
punctuate shocking news stories or illustrate results of scientific studies. This format allows
them to be remembered more easily and spread more quickly. Through this course I have
learned that there is much more to statistics than these simple numbers. Behind statistics there
lies a wealth of information that one can access if they understand how to examine them through
statistical analysis.
Descriptive Statistics
Statistics, in general, help us to extract meaning from data (Hand, 2008). Descriptive
statistics, as the name implies, helps us by describing information about data numerically
(Saunders & Brown, 2007). Data collected on groups can be quite large and overwhelming.
Summarizing characteristics of the group makes it easier to gain meaning and understanding
(Tanner & Youssef-Morgan, 2013). Two such statistics that can be found are the measure of
central tendency and the measure of variability (Tanner & Youssef-Morgan, 2013). Central
tendency tells us the most common data while variability describes the range of difference in the
group (Tanner & Youssef-Morgan, 2013).
Inferential Statistics
The usefulness of descriptive statistics also extends to larger populations outside of the
sample they describe. These generalizations of sample characteristics on populations are
inferential statistics (Tanner & Youssef-Morgan, 2013). Inferential statistics are useful for
populations too large to examine as a whole (Tanner & Youssef-Morgan, 2013). In a global
business world this happens quite often. So, with the greater need for inferential statistics there

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has come a greater need for ways to verify that these samples represent the populations they are
supposed to represent.
Examining Statistical Results
There are many tests that can be used to examine statistical results. A z-test uses the
sample mean, the mean of the distribution of sample means, and the standard error of the mean
to determine if a sample is representative of the population (Tanner & Youssef-Morgan, 2013).
This has a limitation, however, as you must know the standard error of the mean for the
population. The t-test bypasses this issue by estimating the standard error of the mean as the
standard deviation of the sample divided by the square root of the sample size (Tanner &
Youssef-Morgan, 2013). ANOVA tests do the same thing as t-tests, but are capable of quickly
comparing different groups (Tanner & Youssef-Morgan, 2013). They also have the ability to
compare multiple categorical variables through factorial ANOVA tests (Tanner & YoussefMorgan, 2013).
Correlation
Beyond the question of if a sample represents the population it also sometimes important
to examine the relationship of two variables. Correlation describes the level to which changes in
variables correspond to one another (Tanner & Youssef-Morgan, 2013). A common test for
correlation is Pearsons r which uses the mean and standard deviation through the z formula to
compare the changes in two variables (Tanner & Youssef-Morgan, 2013). Pearsons test requires
that both variables be interval or ratio, but there are other tests that do not have this requirement
(Tanner & Youssef-Morgan, 2013). Point-biserial allows for one of the variables to be nominal
such as gender (Tanner & Youssef-Morgan, 2013). Spearmans rho can find correlation between

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two ordinal variables, one ordinal and one interval or ratio, or two interval or ratios where one or
both are not distributed normally or do not have similar variability (Tanner & Youssef-Morgan,
2013).
Regression
Regressions are another toolset that allows for the relationship between variables to be
used for predictive purposes (Tanner & Youssef-Morgan, 2013). By knowing the correlation of
variables regressions allow for precise calculation of one from values of others (Tanner &
Youssef-Morgan, 2013). The known variable in a two variable or simple regression is called a
predictor variable while the calculated variable is the criterion variable (Tanner & YoussefMorgan, 2013). Multiple regressions allow for greater versatility by employing more than one
predictor (Tanner & Youssef-Morgan, 2013). This can be helpful in business applications where
reality is less straightforward (Tanner & Youssef-Morgan, 2013).
Selecting the Appropriate Test
Inferential tests fall into two categories. Parametric tests deal with interval and ratio data
that is of a normal distribution (Bettany-Saltikov & Whittaker, 2014). Nonparametric tests do
not have these restrictions, but are somewhat less powerful (Bettany-Saltikov & Whittaker,
2014). Beyond this determination it is also important to know the nature of the data you are
testing. Whether a variable is measured across multiple participants or is repeated for
participants and how many levels are within the variables also affects which test to use (BettanySaltikov & Whittaker, 2014).
Hypotheses

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When performing one of the tests the first thing you must do is form a hypothesis.
Developing hypotheses is based on observations and the question you are asking (BettanySaltikov & Whittaker, 2014). For each test there is a pair of hypotheses: the null and the
alternate (Tanner & Youssef-Morgan, 2013). The null hypothesis states that there is no
significant difference between the sample and the population it is representing while the alternate
hypothesis states that there is a difference (Tanner & Youssef-Morgan, 2013). In a one-tailed the
hypotheses will also describe the direction of the difference as either greater or less than (Tanner
& Youssef-Morgan, 2013). For a two-tailed test the direction does not matter only that there is a
difference (Tanner & Youssef-Morgan, 2013).
Conclusion
Performing a study to collect data is only just the very beginning of finding answers. By
examining the data statistically it is possible to gain understanding. From descriptive statistics
which help describe the data to inferential data that helps us learn about larger populations there
is much that can be done with collected data. Knowing the tests available, how to select the
proper one, and how to formulate appropriate hypotheses unlocks the full potential of the data.
Having learned how to apply statistical analysis, I can now unlock the hidden wealth behind the
data.

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References
Bettany-Saltikov, J., & Whittaker, V. J. (2014). Selecting the most appropriate inferential
statistical test for your quantitative research study. Journal Of Clinical Nursing,
23(11/12), 1520-1531 12p. doi:10.1111/jocn.12343
Hand, D. J. (2008). Statistics: A Very Short Introduction. Oxford, GBR: Oxford University Press.
Retrieved from http://www.ebrary.com
Saunders, M., & Brown, R. B. (2007). Dealing with Statistics: What You Need to Know.
Buckingham, GBR: Open University Press. Retrieved from http://www.ebrary.com
Tanner, D. E., & YoussefMorgan, C. M. (2013). Statistics for Managers. San Diego, CA:
Bridgepoint Education, Inc.