Chapter Introduction Copyright © 2011 Pearson Education, Inc 1.1 What is Statistics? Some Basic Ideas Statistics as a discipline Questions we can answer with statistics Variation, patterns and models of 18 Copyright © 2011 Pearson Education, Inc 1.1 What is Statistics? Statistics as a Discipline Science and art of extracting answers from data A statistic is a property of data Statistics can be numbers (like an average) or graphs that display information (like a timeplot) of 18 Copyright © 2011 Pearson Education, Inc 1.1 What is Statistics? Typical Questions Statistics Help to Answer Which customers are interested in an MP3 player? How much are customers willing to pay for an MP3 player? Why does a shopper choose a particular box of cereal? of 18 Copyright © 2011 Pearson Education, Inc 1.1 What is Statistics? Variation, Patterns and Models Variation refers to differences among items / individuals or fluctuations over time Patterns are systematic or predictable features in data Models break down variation into a pattern and unexplained variation of 18 Copyright © 2011 Pearson Education, Inc 1.1 What is Statistics? Statistical Models Key to extracting answers from data Good models simplify reality Finding real patterns helps us to understand data, plan for the future, and make better decisions of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Predicting Employment of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Predicting Employment Back in September 2005, how could you forecast employment in October? Use monthly employment data for U.S beginning January 2003 Prepare a timeplot (a chart of values ordered in time) to display monthly employment data of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Timeplot of Employment Data 10 of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Linear Pattern and Region of Uncertainty 11 of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Conclusions Extrapolating the pattern (line) into the future provides a forecast for October Actual employment for October is less than expected and below the anticipated range This surprising result breaks from the pattern and deserves attention (the Katrina effect?) 12 of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Pricing a Car 13 of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Pricing a Car Is $22,000 too much to spend on a 2002 BMW 325i with 53,000 miles? Get prices for a sample of certified used BMW’s from the Philadelphia area in November 2005 Prepare a scatterplot (a graph showing pairs of values) of price versus mileage for this sample 14 of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Scatterplot of Price Versus Mileage 15 of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Line and Region of Uncertainty 16 of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Conclusions The range of uncertainty is so wide because factors other than mileage affect price This model uses all of the data to answer the question about one used car (borrowing strength) $22,000 isn’t too much to pay (it is less than predicted by our line and within the range) 17 of 18 Copyright © 2011 Pearson Education, Inc 1.3 How to Use This Book The Four M’s Motivation: reason for answering a question or solving a problem Method: plan for addressing the problem Mechanics: performing the calculations, generating graphs and displays Message: explanation of conclusions 18 of 18 Copyright © 2011 Pearson Education, Inc ... helps us to understand data, plan for the future, and make better decisions of 18 Copyright © 2011 Pearson Education, Inc 1.2 Previews Predicting Employment of 18 Copyright © 2011 Pearson Education,... with statistics Variation, patterns and models of 18 Copyright © 2011 Pearson Education, Inc 1.1 What is Statistics? Statistics as a Discipline Science and art of extracting answers from data... Statistics can be numbers (like an average) or graphs that display information (like a timeplot) of 18 Copyright © 2011 Pearson Education, Inc 1.1 What is Statistics? Typical Questions Statistics