Quantitative

Data Analysis
Hypothesis testing
Type I Errors, Type II Errors
and Statistical Power

Type I error (): the probability of rejecting

the null hypothesis when it is actually true.

Type II error (): the probability of failing to

reject the null hypothesis given that the
alternative hypothesis is actually true.

Statistical power (1 - ): the probability of

correctly rejecting the null hypothesis.
Choosing the Appropriate Statistical
Technique
Testing Hypotheses on a Single
Mean

One sample t-test: statistical technique that

is used to test the hypothesis that the mean
of the population from which a sample is
drawn is equal to a comparison standard.
Testing Hypotheses about
Two Related Means

Paired samples t-test: examines differences in

same group before and after a treatment.

The Wilcoxon signed-rank test: a non-

parametric test for examining significant
differences between two related samples or
repeated measurements on a single sample.
Used as an alternative for a paired samples t-
test when the population cannot be assumed
to be normally distributed.

McNemar's test: non-parametric method used

on nominal data. It assesses the significance
of the difference between two dependent
samples when the variable of interest is
dichotomous. It is used primarily in before-after
studies to test for an experimental effect.
Testing Hypotheses about
Two Unrelated Means

Independent samples t-test: is done to see if

there are any significant differences in the
means for two groups in the variable of
interest.
Testing Hypotheses about
Several Means

ANalysis Of VAriance (ANOVA) helps to

examine the signicant mean differences
among more than two groups on an interval
or ratio-scaled dependent variable.
 Regression Analysis

Simple regression analysis is used in a situation where

one metric independent variable is hypothesized to affect
one metric dependent variable.

Multiple regression analysis is used in a situation where

we use more than one independent variable to explain
variance in the dependent variable.

Standardized regression coefficients (beta coefficients) are

the estimates resulting from a multiple regression analysis
performed on variables that have been starndardized.

A dummy variable is a variable that has two or more

distinct levels. Dummy variables allow us to use
nominal/ordinal variables as independent variables to
explain, understand, predict the dependent variable.

Multicollinearity is an encountered statistical phenomenon

In which two or more independent variables in a multiple
regression model are highly correlated.
Simple Linear Regression
 Other Multivariate Tests and
Analysis
1. Discriminant Analysis helps to identify the independent
variables that discriminate a nominally scaled dependent
variable of interest.

2. Logistic Regression used when the dependent variable is

nonmetric.

3. Conjoint Analysis is a statistical technique that is used in

many fields including marketing, product management, and
operations research.

4. Two-way ANOVA used when we want to examine the effect

of two nonmetric independent variables on a single metric
dependent variable.

5. MANOVA tests mean differences among groups across

several dependent variables simultaneously by using sums
of squares and ceoss-product matrices.

6. Canonical Correlation used when we want to examine the

relationship between two/more dependent variables and
several independent variables.
 Data Warehousing, Data
Mining, and Operations
Research

Data Warehouse it serves all data that collected

from disparate sources including those pertaining
to the companys finance, manufacturing, sales,
etc.

Data Mining is a strategic tool of the company for

reaching new levels of business intelligence. Data
mining helps to clarify the underlying patterns in
different business activities which in turn
facilitates decision making.

Operations Research/Management Science

another tool that used by the manager to identify,
analyze, solve intricate problems of great
complexity. It provides an additional tool to the
manager by using quantification to supplement
personal judgement.
Some Software for Data
Analysis

LISREL

MATLAB

SAS/STAT

SPSS

Stata