What is a Statistic?
- Statistic: the quantity of one thing, compared to the quantity of a similar thing, over time.
- Analysis: a detailed examination of the elements or structure of something.
LECTURE SCRIPT (you can also turn on close captioning by clicking the CC button):
In business or education, you may encounter the field of statistics and think it is quite complicated and performed by people with extensive math backgrounds and training, which it is.
Even the dictionary defines statistics as, “a branch of mathematics dealing with the collection, analysis, interpretation, and presentation of masses of numerical data.”
Those kinds of statistics definitely have their place, but for our purposes, we want a simple and effective way to measure how something is doing – whether it is doing better, the same or worse – and have effective tools so we can take appropriate action.
In this course, we will define statistic as, “The quantity of one thing, compared to the quantity of a similar thing, over time.”
You should mark that definition well, as statistics can steer you wrong when you compare one thing to another thing that isn’t the same, you disregard the time, or don’t measure quantities.
What are these quantities?
Money or the value of something in money, amount of work done, sales figures, audience attendance, weight loss, website visits; anything really, as long as it is a real factual measurable thing.
A statistic could also be called a measurement of something that has been produced or created, which aligns with the goals and purposes of an activity.
These statistics create trouble when time is left out, such as someone saying, “We aren’t making as much income this year as we did last year!”
The executive fire alarms go off, and everyone runs around to “handle” this “problem,” when on further inspection, the person was talking about ALL of last year’s income, as compared to the first six months of income this year.
In other words, the time was dropped out.
This statement; “According to our figures (statistics), we aren’t making as much income for the first 6 months of this year as compared to the income we made for the first six months of last year,” would indicate something to look at.
Comparing two unlike things can also lead you down the wrong road.
If you see a statistic that compares apples to oranges, as in how many apples were sold versus how many oranges were sold, that may be useful to see what customers like better, apples or oranges, and can be used to predict inventory during those months of comparison.
But that only shows whether customers liked apples or oranges, at that one store, in that location, during those months.
So, it would be better to use this to predict inventory for that one store, during those same months next year.
Financially, you want to compare something like how many apples were sold last month to how many apples were sold this month; then how many oranges were sold last month to how many oranges were sold this month.
That fits our definition of “Statistics are the quantity of one thing, compared to the quantity of a similar thing, over time.”
Why is this important?
As you’ll see later in the course, the first thing to check when you are looking at or dealing with statistics is making sure that like things are being compared over time.
The second would be verifying the data, that the statistic numbers are correct
Once you have that, it would be the skill in which these statistics are used to strengthen or recover what is being measured.
After all, the whole reason for taking this course and knowing this subject is to gain an ability to track and read statistics properly, then act or offer solutions that will effectively place you in control of your job, your business, or your life.
And don’t be surprised if people start looking at you as some sort of genius.