Quantitative Methods

Dr. Shweta Mogre

Statistics
 Statistics is the study of the collection, analysis, interpretation,
presentation, and organization of data. In other words, it is a
mathematical discipline to collect, summarize data.
 The word of statistics has been derived from the ‘status’, which is Latin
word OR ‘Statista’ which is Italian word. In the18th century, Prof. G. F.
Achenwall has been used it first time. These words were used for political
state of the region during early period. The Italian word ‘Statista’ was used
to maintain the records of census or data related to wealth of a state/
nation. Successively, the meaning and usage of statistics extended and
there onwards its nature also changed.
Need of Statistics
● Statistics helps to make sense of large sets of data and predict trends for
future.
● It is vital for validating hypotheses and models.
● Informed decision-making
● Understanding customers
● Risk assessment
● Predictive analysis
● Quality control
Applications of Statistics in Business and Management

Marketing

Applications
Personnel of Statistics Finance

Production
Limitations
❖ Statistics does not study qualitative phenomena.
❖ Statistics does not study individuals.
❖ Statistics can be misused.
Variable
Basic Terms
❖ A variable is a characteristic of an item or individual.
❖ The different values associated with a variable is known as
data.
❖ Values are meaningless unless their variables have
operational definitions
Data Structure
Number of Variables

Kind of information

Time based , Place

based
Number of Variables
Univariate Data

Bivariate Data

Multivariate Data
 Data Types

Categorical Numeric

Discrete Continuous
Data Type

Data Type Information Type Measurement

Type

Categorical Do you practice Yoga? Yes No

Discrete How many books do you have in Number(integer

library ? value)
Numerical
Continuous What is your height? Any Numerical
value
Data Type Based on Time & Place

Time Series Data

Cross Sectional Data

Panel Data
Measuring Variables
•To establish relationships between variables,
researchers must observe the variables and record their
observations. This requires that the variables be
measured.
•The process of measuring a variable requires a set of
categories called a scale of measurement and a
process that classifies each individual into one category.
 Measurement Scales

Categorical Numeric

Ordinal Interval Ratio

Nominal
Types of Measurement Scale
1. Nominal
2. Ordinal
3. Interval
4. Ratio
[Link] SCALE
● It is a system of assigning number symbol to events in order to label
them.
● Example : Code number assigned to customer of a telephone company,
credit card holder of a bank etc.
● It provide convenient way of keeping track of people ,object and event.
● The Numbers assigned in Nominal Scale cannot be added , subtracted,
multiplied or divided.
● Only count of each category can be carried out.
● Mode and Chi square test can be computed.
Example
 Are you married?
1. Yes
2. No
 What is your area of Interest?
1. HR
2. Marketing
3. Finance
2. ORDINAL SCALE
● Using this scale one can rank objects based on certain
characteristics or attributes of the objects.
● Numbers indicate the relative position of objects but not the
magnitude of difference
● Example: Ranking the product of a company according to the
satisfaction of customer
• Ranking telecom companies according to range of services
provided .
• Ranking of largest fast food companies
 Attribute Rank
Rank the following attributes while Food quality
choosing a restaurant for dinner. The
Prices
most important attribute may be
ranked one, the next important may Menu variety
be assigned a rank 2 and so on. Ambience
Service

Attribute Rank
Rank the following by placing a 1
After sale service
beside the attribute you think is the
most important, a 2 beside the Prices
attribute you think is the second most Re-sale value
important and so on while purchasing
Fuel efficiency
a two-wheeler
Aesthetic appeal
Examples

Statement Not Somewhat Moderately Very Extremely

helpful helpful Helpful Helpful helpful

The Computer tutorial is

ORDINAL SCALE
● The distance between the ranks may or may not be equal in respondent
mind.
● This often results in inaccurate interpretation.
● Assigned Ranks cannot be added , subtracted, multiplied or divided.
● Median, Percentile, Quartile can be computed.
● The Rank order correlation between two attributes can be determined to
check their correlation.
3. INTERVAL SCALE
● This scale has properties of order and distance.
● The number on scale are placed at equidistance.
● It has Arbitrary zero point & and constant unit of
measurement.
● The difference of the score on the scale has meaningful
interpretation.
● The numbers on this scale can be added , subtracted,
multiplied or divided.
Examples
● Temperature:
 When we measure temperature (in Fahrenheit) the distance from 30-40
same as distance from 70-80.
 The interval values are interpretable
● Percent Change in employment
● Percent Return of Stock
● Dollar Change in Stock Price
Examples
● Method of Summated Ratings to measuring Attitude (Likert scale)

Statement Strongly Disagree Neutral (3) Agree (4) Strongly

Disagree (2) Agree (5)
(1)
My job offers me a
chance to test my
abilities
INTERVAL SCALE
● Interval Scales are also termed as Rating scales.
● These are widely used in marketing research.
● Entire range of statistical operations can be employed (mean, correlation,
regression).
● Strong Statistical tests like t-test and F-test can be used.
4. RATIO SCALE
● Ratio Scale have an absolute or true zero of measurement,
which implies the absence of any trait.
● Ratio scale provides the most detailed information as
researchers and statisticians can calculate the central tendency
using statistical techniques such as mean, median, mode, and
methods such as geometric mean, the coefficient of variation,
or harmonic mean can also be used on this scale.
RATIO SCALE
● Ratio scale accommodates the characteristic of three other variable
measurement scales, i.e. labeling the variables, the significance of the
order of variables, and a calculable difference between variables (which
are usually equidistant).
RATIO SCALE
● Examples:
■ Distance
■ Time
■ Store sales
■ Market shares
■ No. of Mistakes/Errors
■ No. of Complaints
Example
● What is your daughter’s current height?
○ Less than and equal to 5 feet.
○ 5 feet 1 inch – 5 feet 5 inches
○ 5 feet 6 inches- 6 feet
○ More than 6 feet
● What is your weight in kilograms?
○ Less than 50 kilograms
○ 51- 70 kilograms
○ 71- 90 kilograms
○ 91-110 kilograms
○ More than 110 kilograms
Thank You