Content of tutorials for the course Statistics in Economics and Management

I week
1. Introduce yourself to students.
2. Explain methods of work and a system of evaluation.
Mode:
Required materials for next week classes will be placed on the course web page
(www.efsa.unsa.ba/nastava) in the current week. Students should be required to bring
calculator and materials from the site on the class. Students will be presented methodological
examples and they are expected to actively participate in the class. Students could also find
tasks for independent work in the materials. At the beginning of the class, a brief discussion
regarding the results of these examples is expected to be developed.
Evaluation:
10% - on line quizzes
10% - processing seminar topics
40% - midterm test
40% - final test
3. Recapitulation of basic concepts:
a. The definition of a mass phenomenon.
The mass phenomenon is a phenomenon that is manifested by the large number of objects.
We are investigating a mass phenomenon on the basis of information about the
characteristics (features, properties) of the elements that comprise them.
b. The definition of statistical units and statistical set (population).
The statistical units are the elements with series of features which serve as a base to
investigate the variation of the mass phenomenon (e.g. for mass production, the statistical
units can be factory or drive or machine). The size of the statistical set can be finite or
infinite.
A set of statistical units is statistical set, population or the basic set (e.g. for the mass
phenomenon such as production, statistical set is the set of all factories in a region or the set
of working facilities in the factory or the set of machinery in the facility or factory).
The statistical set size (denoted by N) is the number of statistical units that form one
statistical set.

Example 1:
Mass phenomenon: unemployment
Statistical set: working age population
Statistical units: working capable resident

c. The definition of statistical variables.

Statistical variable is:
a. A characteristic by which population units vary.
b. A function that assign one value to each statistical unit from a population
d. Types of scales of measurement
Scales of measurement define the rules of association for establishing a statistical variable. They
can be:

The nominal scale of measurement - A descriptive list of characteristics in which

statistical units vary. The order is irrelevant. Each modality has the same relative
importance. No mathematical operations are allowed. Only counting is possible.

The ordinal scale of measurement - Modalities are expressed descriptively, they can be
ordered according to a logical sequence. Sequence matters, not all modalities have the
same weight. Counting and logical operations of comparison (<, =, >) are allowed, but
not mathematical operations. It is possible to replace descriptive modalities by ordered
lists.

The interval scale of measurement - Modalities are expressed numerically, but the
position of zero is arbitrary. A zero does not mean absence of phenomenon. Differences
in measuring characteristics of elements are represented in differences in numbers in the
interval scale. Counting, subtraction and comparison are allowed.

The metric (ratio) scale of measurement - Modalities are numeric and a natural zero is
present. A zero stands for the absence of a phenomenon. All logical and mathematical
operations are allowed. It enables the most precise and comprehensive analysis.
e. Types of statistical variables.

Types of statistical variables according to the type of the scale of measurement:

Qualitative
o Nominal (attributive) (e.g., eye color)
o Ordinal (e.g. the profession of a university employee)

Quantitative

o Discrete -it can take only certain values from the interval (e.g. the grade)
o Continuous - it can take any value from the interval (e.g. height or weight).
f. Types of frequencies.
o Absolute frequency the number of occurrences (repetitions) of a modality.
n

fi ,

f
i =1

=N

o Relative frequency - proportion of statistical units with the same modality.

n
f
pi = i , pi = 1
N i =1
o Increasing absolute cumulant (Cumulative frequency) - shows number of data that have the
value that is equal to or lower than the value of present modality.

CAF i =

fj
j =1

o Increasing relative cumulant (Cumulative relative frequency) - what is the percentage of

data with a value equal to or lower than the value of present modality (multiplied by 100%).

CRF i =

pj
j =1

Example 2:
Determine the correct data type (quantitative or qualitative). Determine whether quantitative data
are continuous or discrete. Also, determine whether qualitative data are nominal or ordinal.

The number of car accident per countries

The price of bread
The temperature in Sarajevo on 18th of February in the last 10 years
The negotiation skill of a person
Persons favorite color
The car wheel radius
The gravitational force
The qualification structure of employees
The level of country development
The newborns weight
The height of the building
Understanding of production process
Religion
Employment status
The number of children in the household
The light intensity
The amount of saving
The number of correct answers on a quiz
Solution:

The number of car accident per countries

Quantitative discrete variable
The price of bread
Quantitative continuous variable (if we observe the price in currency) or a qualitative ordinal
variable (if we consider the price to be low or high)
The temperature in Sarajevo on 18th of February in the last 10 years
Quantitative variable with interval scale because 0 does not mean the absence of phenomenon
The negotiation skill of a person
Qualitative ordinal variable (poor, good, very good, excellent)
Persons favorite color
Qualitative nominal (attributive) variable (modalities are given descriptively: all of modalities
have the same relative significance, if you isolate the subjective feeling)
The car wheel radius
Quantitative continuous variable obtained by measuring
The gravitational force
Quantitative continuous variable (if we measure in Newtons) or qualitative ordinal variable (if
we take an week, medium and strong).
The qualification structure of employees
Qualitative ordinal variable (highly qualified, qualified, non qualified)

 The level of country development

Qualitative ordinal variable (least developed countries, developing countries, developed
countries)
The newborns weight
Quantitative continuous variable is obtained by measuring
The height of the building
Quantitative continuous variable is obtained by measuring
Understanding of production process
Qualitative ordinal variable (low, medium, good, excellent) or quantitative discrete variable (if
the evaluation score 5 to 10)
Religion
Qualitative nominal (attributive) variable (modalities are given descriptively: all of modalities
have the same relative significance (importance), if you isolate the subjective feeling)
Employment status
Qualitative nominal (attributive) variable- modalities are given descriptively: all of modalities
have the same relative significance (importance)
The number of children in the household
Quantitative discrete variable
The light intensity
Qualitative ordinal variable (low, medium, strong) or quantitative continuous variable obtained
by measuring in the lux)
The amount of saving
Quantitative continuous variable
The number of correct answers on a quiz
Quantitative discrete variable

Example 3:
The following data are the number of groceries in 20 suburbs:
1
2
1
3
3

2
4
2
4
5

5
6
2
2
1

6
2
2
3
5

a) Compare and comment the statistical series with the gross data, arranged statistical series
and statistical distribution of frequencies.
b) Calculate and explain the relative frequencies. Analyze population structure.
c) Calculate and explain the cumulative absolute frequencies.
d) Calculate and explain the cumulative relative frequencies.
Solution:

Population - suburbs, Statistical unit - suburb, Population size - N = 20. Variable (characteristic)
- the number of groceries in the suburb, Type of variables - quantitative discrete, Modalities 1,2,3,4,5,6,.
a) The series with gross statistical data is presented in the table above. That is the database with
data for each city ("scattered data"). In order to obtain the arranged statistical series, we must
sort the data by size:
1
2
2
3
5

1
2
2
4
5

1
2
3
4
6

2
2
3
5
6

The final form of data grouping is statistical distribution of frequencies, where each modality
(modality has n) is associated with appropriate absolute frequency (number of modality
repetitions in database):
xi - i modality of observed characteristics
f i - Absolute frequency, frequency (the number of impressions) of the i-th modality (classes,
interval)
n - number of modalities (classes, interval)

Number of
groceries
(modalities) - xi

Number of
suburbs
(absolute
frequency) - fi

Relative
frequency - pi

1
2
3
4
5
6

3
7
3
2
3
2
20

0,15
0,35
0,15
0,10
0,15
0,10
1,00

Last cumulative absolute

frequency must always be
equal to N.

Cumulative
absolute
frequency CAF i
3
10
13
15
18
20

Cumulative
relative
frequency CRF i
0,15
0,50
0,65
0,75
0,90
1,00

Last cumulative relative

frequency must always be
equal to 1.

fi
- Relative frequency (if you multiply by 100 we will get frequency percentage
N
Pi = pi 100% ) showing percentage participation of each modality in the structure of the
population.

b) pi =

Analysis of the structure:

The most suburbs have 2 groceries - 35%, while the rarest are the suburbs with four and six
groceries - 10%.

The structure of population according to

number of groceries

10%

15%

15%

10%

35%
15%

1
2
3
4
5
6

c) Increasing absolute cumulant (Cumulative frequency) - How many of the data has the
value less than or equal to the value of observed modality. For example, we read from the
table that CAF i ( x i = 3) = 13 , which means that 13 suburbs have 3 or less than 3
groceries.
d) Increasing relative cumulant (Cumulative relative frequency) - What is the % of data that
have a value less than or equal to the value of observed modality (if it is multiplied by
100%). For example, we read from the table that CRF i ( x i = 2) = 0,50 , which means
that 50of suburbs have 2 or less than 2 groceries.

Example 4:
15 students have been asked about the number of movies they have been watched at the cinema
during the past three months. Their answers are given in the following table:
2
10
11

5
7
5

1
13
8

8
4
5

3
9
7

a) Compare and comment the statistical series with the gross data, arranged statistical series
and statistical distribution of frequencies.
b) Calculate and explain the relative frequencies. Analyze population structure.
c) Calculate and explain the cumulative absolute frequencies.
d) Calculate and explain the cumulative relative frequencies.
e) Present the statistical frequency distribution using the polygon of absolute frequencies.
Solution:
a) In order to obtain the arranged statistical series, we must sort the data by size:
1
5
8

2
5
9

3
7
10

4
7
11

5
8
13

This series contains the large number of different modalities, therefore it is not practical to group
data in a statistical frequency distribution as we did at the previous example. In such cases and
also in the cases of continuous variable, it is recommended to group data into interval frequency
distribution. The given data are grouped into 3 intervals, presented in the table below:
Ri intervals
(real borders)

0-5
5-10
10-15
sum

ci
midpoint
of interval
2,5
7,5
12,5

fi

pi

CAF i

CRF i

4
8
3
15

0,27
0,53
0,20
1,00

4
12
15

0,27
0,80
1,00

b) For example, p2 = 0,53 , which means that 53% of students have been watched from 5 to 10
(in fact from 5 to 9) movies at the cinema during the last three months.
Analysis of the structure:
The most of the students (53%) have been watched 5 to 10 movies while the rarest are students
(20% of them) who have been watched 10 to 15 movies at the cinema during the last three
months.
8

The following graph represents the structure of the investigated population:

The structure of population according to

number of movies

20%

27%
0-5
5-10
10-15

53%

c) Increasing absolute cumulant: CAF 2 = 12 , which means that 12 of students have been
watched less than 10 (upper border) movies at the cinema, during the last three months.
d) Increasing relative cumulant: CRF 2 = 0,80 , which means that 80% of students have been
watched less than 10 movies at the cinema, during the last three months.
e)

Absolute frequencies

Polygon of absolute frequencies

10
8
6
4
2
0
2,5

7,5

12,5

Midpoint of intervals

Example 5:
The data, given in table below, present the number of people from the population of 15 years and
older according to the level of education and gender. Data are collected in the 1991 census and
obtained from the Statistical yearbooks of the Federation of Bosnia and Herzegovina in 2003:
SCHOOL COMPLETED
No schooling
1-3 grade of elementary school
4 grade of elementary school
5-7 grade of elementary school
Elementary School
High school
College
Faculty
Unknown

Men
98.420
31.311
212.378
41.732
421.045
671.058
56.759
77.240
47.397

Women
372.762
49.919
277.185
45.831
397.316
421.314
35.742
45.727
46.506

Analyze the structure of educational level and present it graphically.

Solution:
SCHOOL
COMPLETED

Men
f Mi

PMi =

Women
f Mi
(%)
PWi =
f Wi
f Mi
i

No schooling
98.420
1-3 grade of
31.311
elementary school
4
grade
of
212.378
elementary school
5-7 grade of
41.732
elementary school
Elementary
421.045
School
High school
671.058
College
56.759
Faculty
77.240
Unknown
47.397
TOTAL
1.657.340

Total
fWi
(%)
P =
f Ti = f Mi + fWi Ti
fWi
i

5,94 372.762

f Ti
(%)
f Ti
i

22,03

471.182

14,07

49.919

2,95

81.230

2,43

12,81 277.185

16,38

489.563

14,62

45.831

2,71

87.563

2,61

25,40 397.316

23,48

818.361

24,43

40,49 421.314
3,42 35.742
4,66 45.727
2,86 46.506
100,00 1.692.302

24,90
2,11
2,70
2,75
100,00

1.092.372
92.501
122.967
93.903
3.349.642

32,61
2,76
3,67
2,80
100,00

1,89

2,52

Structure of the men by level of education:

Bar chart:

10

Structure of the men by level of education

700.000
600.000

number of men

500.000
400.000
300.000
200.000
100.000
Unknown

Faculty

College

High school

Elementary School

5-7 grade of
elementary school

4 grade of
elementary school

1-3 grade of
elementary school

No schooling

level of education

Structure of the men by level of education:

Structural circle:
Structure of the men by level of education

College
3%

Faculty
5%

Unknown
3%
No schooling
6%

1-3 grade of
elementary school
2%
4 grade of elementary
school
13%
5-7 grade of
elementary school
3%

High school
40%

Elementary School
25%

The structure of the women by level of education:

Bar chart:

11

37
2.
76
2

350.000

27
7.
18
5

300.000
250.000
200.000
150.000

46
.5
06

45
.7
27

35
.7
42

50.000

45
.8
31

100.000
49
.9
19

number of women

400.000

39
7.
31
6

450.000

42
1.
31
4

The structure of the women by level of education

Un
kn
ow
n

Fa
cu
l ty

Co
l le
ge

sc
ho
ol
Hig
h

1-3
No
gra
sc
ho
de
o lin
of
g
ele
me
nta
4g
ry
rad
sc
ho
eo
ol
fe
lem
en
5-7
tar
gra
ys
cho
de
of
ol
ele
me
nta
ry
sch
oo
l
El e
me
nta
ry
Sc
ho
ol

level of education

The structure of the women by level of education:

Structural circle:
The structure of the women by level of education
Unknow n
3%
Faculty
3%
College
2%

High school
25%

No schooling
22%

1-3 grade of elementary

school
3%

4 grade of elementary
school
16%
Elementary School
23%

5-7 grade of elementary

school
3%

12

The structure of the population 15 years and older by level of

education
1.200.000
1.000.000
800.000
600.000
400.000
200.000
Unknown

Faculty

College

High school

Elementary School

5-7 grade of elementary

school

4 grade of elementary
school

1-3 grade of elementary

school

0
No schooling

numeber of the population 15 years and

older

The structure of the population 15 years and older by level of education:

Bar chart:

level of education

The structure of the population old 15 and over year by finished the school:
Structural circle:
Population structure 15 year and older according to level of
education
Unknown
3%
Faculty
4%
College
3%

High school
32%

No schooling
14% 1-3 grade of
elementary school
2%
4 grade of
elementary school
15%
5-7 grade of
elementary school
3%
Elementary School
24%

13

Parallel track of the population structure according to the both characteristics (gender and
the level of education):
Graph with splited columns (Clustered column):

700.000
600.000
500.000
400.000
300.000
Men

200.000

Women
Unknown

Faculty

College

High school

Elementary School

5-7 grade of
elementary school

4 grade of
elementary school

1-3 grade of
elementary school

100.000
No schooling

number of the population old 15 and over

year

Population structure according to gender and the level of education

level of education

Parallel track of the population structure according to the both characteristics (gender and
the level of education):
Graph with divided columns (Stacked column):

1.200.000
1.000.000
800.000
Women

600.000

Men

400.000

Unknown

Faculty

College

High school

Elementary
School

5-7 grade of
elementary
school

4 grade of
elementary
school

1-3 grade of
elementary
school

200.000

No schooling

number of the population old 15 and over year

Population structure according to gender and the level of

education

level of education

14