Module 1:-Basic Statistics
Measures of central tendency: - mean, median,
mode; Measures of dispersion-Range, Mean
deviation, Quartile deviation and Standard
deviation; Moments, Skewness and Kurtosis, Linear
correlation, Karl Pearson’s coefficient of
Correlation, Rank correlation and linear
regression.
MEASURES OF CENTRAL TENDENCY
An average is a single significant figure which sums up smallest values in a series
the characteristics of a group of figures. An average is
called a measure of central tendency since it
determines the central value to which the items in a
series tend to cluster. Important measures of central
tendency are:
(i) Mean
Arithmetic mean is obtained by dividing the sum total
of the values of items with its number.
∑x/n OR ∑fx /n
Merits:
It is rigidly defined
Easy to calculate
Simple to understand
It is based on all observations in a series
It is less affected by sampling fluctuations
It is amenable to further algebraic treatment
Demerits:
Affected by extreme values
Mean cannot be calculated from frequency
tables with open end classes
Sometimes mean will be a value not found
in the series and it may be an absurd value
Cannot be applied for qualitative data
(i) Median
Median is the middlemost item in an arranged series. It
is called positional average
Value of ((n+1) /2 )th item
OR
Median = L + ((N/2-m)C) / f
Merits:
Can be easily calculated
Simple to understand
Not affected by extreme values
Can be correctly estimated from frequency
tables with open end classes
Can be estimated graphically
Most appropriate average to deal with
qualitative data
Demerits:
Not based on all the items in a series
Not capable of further algebraic treatment
More affected by sampling fluctuations
If estimated from a small number of items
median need not be good representative of
the given data
(ii) Mode
Mode is the most frequently occurring item in a series
Merits:
Can be easily calculated and readily
understood
Not affected by extreme values
It can be calculated from frequency tables
with open ended classes
A mode is the most popular value in a series
and it gives the true representative value
Demerits:
Mode is not rigidly defined
Not based on all items in a series
Can’t be used for further algebraic treatment
Much affected by sampling fluctuations
Some series may have more than one mode
and some other may have no mode at all.
Mo = Value of the item with highest frequency
OR
Mo = L1 + (Cf2) / (f1+f2)
MEASURES OF DISPERSION MOMENTS
Dispersion may be defined as the spread of the Moments are the arithmetic mean of the powers of
items in a series around its average. A measure of deviations in a series either from its mean or any
dispersion can be expressed either in the absolute arbitrary origin
form or in the relative form. Absolute measures of Central moments
dispersion are expressed in the same unit in which If moments are estimated by taking deviation of
data are collected. items from its arithmetic mean, they are called
Absolute measures of dispersion include: central moments
(i) Range 𝜇1 = ∑(x-M) / n or ∑f(x-M) / n
Range is the difference between the largest and 𝜇2 = ∑(x-M)2 / n or ∑f(x-M)2 / n
𝜇3 = ∑(x-M)3 / n or ∑f(x-M)3 / n
RANGE = L – S 𝜇4 = ∑(x-M)4 / n or ∑f(x-M)4 / n
L= largest item, S=Smallest item Raw moments
L–S If moments are estimated by taking deviation of
Coefficient of range = ------- items from an arbitrary origin, they are called raw
L+S moments.
(ii) Quartile deviation 𝜇′1 = ∑(x-a) / n or ∑f(x-a) / n
Quartile deviation is defined as the half of the 𝜇′2 = ∑(x-a)2 / n or ∑f(x-a)2 / n
distance between the third and the first quartiles 𝜇′3 = ∑(x-a)3 / n or ∑f(x-a)3 / n
Q3 – Q1 𝜇′4 = ∑(x-a)4 / n or ∑f(x-a)4 / n
QD = -------------
2 SKEWNESS:
Q1 is the value of [(n +1)/4]th item Lack of symmetry is called Skewness. If a
OR distribution is not symmetrical then it is called
(N/4 – m1) skewed distribution.
Q1 = L1 + -------------- X C Positively skewed distribution:
F1 If the frequency curve has longer tail to right
the distribution is known as positively skewed
Q3 is the value of [3(n+1)/4]th item distribution and Mean > Median > Mode.
OR
3(N/4 – m3)
Q3 = L1 + -------------- X C
F3
(iii) Mean deviation
Mean deviation is defined as the arithmetic mean of
the absolute deviations of items from an average.
∑|d|
Negatively skewed distribution:
------
If the frequency curve has longer tail to left
n
the distribution is known as negatively skewed
(iv) Standard deviation
distribution and Mean < Median < Mode.
Standard deviation is the positive square root of the
Measure of Skewness
arithmetic mean of the squares of deviations from
Karl Pearson coefficient of Skewness
arithmetic mean.
= (Mean -Mode) / SD
SD = √∑x2/n - (∑x/n)2 Bowley’s coefficient of Skewness
OR
= [(Q1 + Q3) – 2Median] / Q3 – Q1
SD = √∑fx2/n - (∑fx/n)2
n1(𝜎12+d12)+n2(𝜎 22+d22) KURTOSIS
COMBINED SD = √ -------------------------------- Kurtosis measures the degree of peakedness or
n1 + n2 flatness of a frequency distribution, usually taken
A relative measure of dispersion is the ratio of a relative to a normal distribution.
measure of dispersion to an appropriate average When a frequency curve is more peaked than the
from which deviations are measured. normal curve, it is called leptokurtic. When it is
(i) Coefficient of range more flat topped than the normal curve it is called
(L-S )/ (L+S) platykurtic. Normal curve is smooth, continuous
(ii) Coefficient of quartile and bell shaped is called mesokurtic.
deviation
(Q3 – Q1) / (Q3+Q1)
(iii) Coefficient of mean deviation
MD(M)
= --------
M
(iv) Coefficient of variation
SD X 100 / mean
Measure of Kurtosis
𝛽 = 𝜇4 /(𝜇2)2
When 𝛽 = 3, the curve is mesokurtic. When 𝛽 <3,
the curve is platykurtic. When 𝛽 >3, the curve is
leptokurtic.
CORRELATION
The relationship between two or more variables in a
given series is called correlation and the numerical
measurement of the degree of relationship is called
correlation coefficient
Positive and Negative correlation
Positive Correlation:
The correlation in the same direction is called
positive correlation. If one variable increase other is
also increase and one variable decrease other is also
decrease.
Negative Correlation:
The correlation in opposite direction is
called negative correlation, if one variable is
increase other is decrease and vice versa
Perfect Correlation
If there is any change in the value of one variable,
the value of the others variable is changed in a fixed
proportion, the correlation between them is said to
be perfect correlation. It is indicated numerically as
+1 and -1
Perfect Positive Correlation:
If the values of both the variables are move in same
direction with fixed proportion is called perfect
positive correlation. It is indicated numerically
as +1.
Perfect Negative Correlation:
If the values of both the variables are move
in opposite direction with fixed proportion is called
perfect negative correlation. It is indicated
numerically as -1.
Linear and non linear
Linear
Correlation is said to be linear if the ratio of change
is constant.
Non Linear
Correlation is said to be non-linear if the ratio of
change is not constant.
Simple, partial and multiple correlations
In simple, the relationship between two variables is
considered.
In partial, we study the relationship between one
variable with one of the other variables, presuming
the other variables constant.
In multiple, the relationship between more than two
variables are studied simultaneously
Methods of studying correlation
1. Scatter diagram
Scatter diagram is a visual device to study the
nature of relationship between two variables.
2. Correlation graph
It is a graphical representation of relationship
between two variables.
Karl Pearson’s coefficient of correlation
𝛾=
n∑xy – (∑x * ∑y)
------------------------------------------
√( n∑x2- (∑x)2) * √( n∑y2- (∑y)2)
Rank correlation
The correlation coefficient obtained from the ranks
is called rank correlation
Spearman’s rank correlation = 1- (6∑D2 / (n(n2-1)
REGRESSION ANALSYSIS
Regression analysis means the estimation or
prediction of the unknown value of one variable
(dependent variable) from the known value of the
(independent variable)
Dependent and independent variables
The variable whose value is influenced or is to be
predicted is called dependent variable and the
variable which influences the values or is used for
prediction is called independent variable.
Simple and multiple regressions
When there are only two variables, the regression
equation so obtained is called simple regression.
The regression analysis which studies the
relationship between more than two variables at a
time is called multiple regression.
Linear and non-linear regression
Regression is said to be linear if a unit change in
the value of the independent variable always leads
to a constant change in the value of the independent
variable.
If regression is non-linear if the ratio of change in
the value of the independent variable to the resultant
change in the value of the dependent variable is not
a fixed ratio.
Regression lines
Regression line is a graphic technic to show
functional relationship between dependent and
independent variables. There are two regression
lines,
Regression line y on x
Regression line x on y
Regression equations
Regression equation y on x
Y = a + bx
byx = (n∑xy – (∑x X ∑y)) /( n∑x2- (∑x)2)
Regression equation x on y
X = a + by
byx = (n∑xy – (∑x X ∑y)) /( n∑y2- (∑y)2)
Module 2:- Probability Theory Compound events THEORY OF SAMPLING
Events having two or more sample points as their Population
Sample space, Events, Different approaches to
elements are called compound events A population is the aggregate of all the units under study
probability, Addition and in any field of enquiry. A population can be finite or
multiplication theorems on probability, Sure event
infinite. A population containing finite number of items is
An event whose occurance is inevitable is called a known as a finite population. A population having an
Independent events, Conditional sure event infinite number of objects is termed as an infinite
probability, Bayes Theorem
population.
Impossible event A sample is a finite subset of a population, selected from
PROBABILITY If an event cannot occur when a random experiment it with the objective of investigating its properties. A
Probability of an event may be defined as the is conducted, then that event is called an impossible good sample will have the following characteristics (i)
numerical expression of the likelihood of the event repressiveness (ii) adequacy (iii) independence (iv)
occurrence of that event. It is a number lying homogeneity
Uncertain event
between 0 and 1 Merits:
An event is said to be uncertain if it’s happening is  This method is more economical as data are
neither sure nor impossible collected form only from a part of the
Approaches to probability Equally likely events population.
Classical approach Two events are said to be equally likely if any one  Data can be collected and classified more
P(A) = m/n of them cannot be expected to occur in preference quickly
where, to the other  Small number of investigators needed
m=number of favorable cases Mutually exclusive events  If collection of data results in the destruction of
n=number of total outcomes Two events are said to be mutually exclusive if they units this is the only possible method
Relative frequency approach cannot occur simultaneously  It can be effectively used to verify the accuracy
P(A) = Lt (m/n) of data collected on a census basis
n→ ∝ Partially overlapping events
Demerits:
Subjective approach  If sample units are not carefully selected,
Two events are partially overlapping if both of them sample results may be inaccurate and
This approach measures the confidence of an can occur simultaneously misleading
individual regarding the occurrence of an event Exhaustive events  If sample size is inadequate then the selected
Axiomatic approach Two events are said to be collectively exhaustive sample may not honestly represent the universe
It is based on set theory and is based on the events if taken together they contain all of the  possibility of sampling errors
following principles possible outcomes of the random experiment  sampling method is of no use if the size of
P(S) = 1 Mutually exclusive and exhaustive events population is small
0 ≤ P(A) ≤ 1 A set of events are said to be mutually exclusive  in the absence of well trained and experienced
If two events are mutually exclusive, then and exhaustive if one of them must and only one investigators data collected through sample
P(A U B) = P(A) + P(B) surveys are not reliable
can occur
Types of sampling
Dependent and independent events 1. Probability sampling
Events are said to be independent if the occurrence Simple
Theories of probability or non-occurrence of one event does not influence (a) Lottery method
Addition theorem the probability of the other event Under this method, all items are numbered or named in
case1: when events are mutually exclusive Events are said to be dependent if the occurrence or separate slips and folded and mixed in a container and a
P(A U B) = P(A) + P(B) non-occurrence of one event influence the blind selection of slips are made
Case2: when events are not mutually exclusive probability of the other event (b) Table of random numbers
P(A U B) = P(A) + P(B) – P(A ∩ B) Complement of event
Several standard tables of random numbers are available
among which one prepared by Tippet is the most popular
The event ‘A and the event ‘not A’ are called one. Page form the table is opened and item
Multiplication theorem complementary events corresponding to the first random number obtained is
Case1: when events are independent Union of two events selected
P(A ∩ B) = P(A) X P(B) The union of two events A and B denoted by A U B Complex
Case2: when events are dependent is the set of sample points in A, in B or in both (a) Systematic sampling
P(A ∩ B) = P(A) X P(B/A) Intersection of two events A Systematic sampling is formed by selecting one unit at
OR The intersection of two events A and B denoted as random and then selecting additional units at evenly
P(A ∩ B) = P(B) X P(A/B) spaced additional units until the sample has been formed.
A ∩ B is the set of sample space common to both
(b) Stratified sampling
In this method, population is subdivided into homogenous
Random experiment Conditional probability groups called strata and sample items are selected from
Experiments that are repeated under the same Probability of an event A, given that B has each stratum
condition and the outcomes of which cannot be happened is called the conditional probability of A (c) Cluster sampling
predicted in any repetition is called a random given B and is denoted as P(A/B) In cluster sampling, the given population is divided into
experiment P(A/B) = P(A∩B) / P(B) small groups or clusters. Some of these clusters are then
Random variable P(B/A) = P(A∩B) / P(A) selected at random and sample items are taken from these
If the value of a variable is determined by the selected clusters
outcome of a random experiment, it is called a (d) Multi-sage sampling
Bayes' theorem In this method, sampling is carried out in two or more
random variable.
stages
Probability distribution (e) Sequential sampling
It is a schedule that shows the various values of the In this method, a number of items are drawn and tested
random variable and the probability associated with one after another in sequence till a satisfactory sample lot
each value PERMUTATIONS is obtained
n!
Sample space nP = ------
r 2. Non-probability sampling
The set which contains all the possible outcomes of
a random experiment as the element is the sample (n-r)! (a) Judgment sapling
In this method, selection of sample units is exclusively
space of that experiment
COMBINATIONS based on personal judgments of the investigator
Events (b) Convenient sampling
An event is a subset of a sample space of a random Combination of n objects taking r at a time is
n! A convenience sample is obtained by selecting convenient
experiment nc = --------- units of population for the purpose of data collection.
r
Simple event (c) Quota sampling
If an event contains only a single sample point as its r!(n-r)! In this method, a quota is fixed for collecting samples form
element is a simple event each groups in an universe according to certain specific
traits
Module 3:- Random variables
and distribution
Random variables
If the value of a variable is determined by the
outcome of a random experiment, it is called a
random variable.
Random variables can be classified into two-
Discrete random variable
If a random variable takes specific discrete
values such as 1, 2 , 5, ½ etc.. such random
variables are called discrete random variables.
Continuous random variables
If a random variable can take any of the
infinite values between two limits, such a
random variable is termed as continuous
random variables. Eg.. 0<X<10
Probability distribution is a schedule that
shows the various values of the random
variable and the probability associated with
each value
Mathematical expectations,
The expected value (or expectation, or
mathematical expectation, or mean) of a
random variable is the weighted average of all
possible values that this random variable can
take on. The weights used in computing this
average correspond to the probabilities in case
of a discrete random variable, or densities in
case of a continuous random variable.
If x is a discrete random variable, expected
value is given as:
This can be written as:
E(x) = ∑ X P
If x is a continuous random variable, expected Normal distribution
value is given as:
E(C) = C where C is a constant
E(X+Y) = E(X) + E(Y)
E(aX+B)= aE(X)+b
Where a and b are constants
E(XY) = E(X)* E(Y)
Where X and Y are independent
Var(X) = E(X2) – [E(X)]2
Discrete probability distributions
Binomial distribution
Binomial distribution is a theoretical
distribution which deals with discrete random
variables. It is also known as Bernoulli
distribution after Swiss mathematician James
Bernoulli.
A random variable x is said to follow normal
distribution with parameters n and p if its
probability function is
P(x) = nCx pxqn-x
Where;
n = number of trials
p=probability of success
q=probability of failure (1-p)
x=number of success
n!
n
Cx = ------
x! (n-x)!
Properties of normal distribution
Mean = np
Variance = npq
Std Dev = √ npq
Poisson distribution
Poisson distribution is a discrete probability
distribution discovered by the French
mathematician Simon Denis Poisson.
A random variable X is said to follow a
Poisson distribution with parameter λ if the
probability distribution is given by
P(x) = (λxe-λ) / x!
Where
λ>0
e≈ 2.718
poisson distribution can be used as an
approximation of binomial distribution when
(1) n tends to infinity (2) probability P tends to
zero (3) np is infinity.
Properties of Poisson distribution
 Mean = λ = np
 Variance = λ
 Std Dev = √ λ
 Probability that the event will happen,
P = λ/n
 Probability that the event will not
happen,
Q = 1 – (λ/n)
 Poisson distribution is positively
skewed and leptokurtic
Continuous probability distribution
Normal distribution is the most popular
distribution which deals with continuous
random variables. It was introduced by
English mathematician Abraham De Moivre as
a limiting form of binomial distribution.
Total area under a normal curve represents
total probability ie,1
Properties of a normal distribution
 Normal curve is bell shaped. The
perpendicular drawn from the base
line through the point x = mean will of a parameter B if the expected value of β is
divide the total area under the curve B
into two equal parts.
 Mean= median = mode
 Symmetric distribution
Skewness is 0
 Normal curve is mesokurtic
(kurtosis=3)
 Normal curve is continuous from
minus infinity to plus infinity
 The first and third quartiles are
equidistant from median
M-Q1 = Q3-M
 Asymptotic to x axis
 The two points of inflection of a
normal curve occur at the points
x = mean +sd and
x = mean – sd
 Area under the normal curve is
distributed as follows:
mean±SD covers 68.27% of the total
area
mean±2SD covers 95.45% of the total
area
mean±3SD covers 99.73% of the total
area
Standard normal distribution
A standardized form of normal distribution by
taking mean as 0 and standard deviation as 1 is
known as standard normal distribution. The
normal variable x can be converted into
standard normal variable Z using the following
formula
Z = (x – m) / SD
Where
m = mean
SD = Std dev
Module 4: Theory of Estimation
Estimation
Estimation refers to the process by which one
makes inferences about a population based on
information obtained from sample.
Point estimator
An estimate of a population parameter given
by a single number is known as a point
estimator of the parameter. Mean (Ẋ) is an
example of point estimator.
Interval estimator
An estimate of a parameter given by two
numbers between which the parameter is
expected to lie is called an interval estimate of
the parameter.
Properties of good estimator
Unbiasedness
A statistic β is said to be an unbiased estimator
E (β = B)
Consistency
A desirable property of a good estimator is that
the accuracy should increase when the sample
size becomes larger.
Efficiency (minimum variance)
Among two consistent estimators, the
estimator with the smaller variance is said to
be more efficient
Sufficiency
An estimate β is said to be a sufficient
estimator of B if it contain all information
about B.
Maximum Likelihood estimation Given the test scores of two random samples t Test-for difference of means.
It is a method of point estimation with some of men and women, does one group differ The t statistic to test whether the means are
strong theoretical properties than the ordinary from the other? A possible null hypothesis is different can be calculated as follows:
least squares method. The method of that the mean male score is the same as the
maximum likelihood selects values of the mean female score:
model parameters that produce a distribution H0: μ1 = μ2
that gives the observed data the greatest where: Where
probability. The ML estimator of variance H0 = the null hypothesis
=∑(X-Ẋ)2 / n μ1 = the mean of population 1, and
The ML method is a large sample method. It μ2 = the mean of population 2.
has got broad application in that it can be Types of errors, Here is the pooled standard
applied to regression models that are nonlinear A type I error, also known as an error of the deviation, 1 = group one, 2 = group two. The
in parameters. first kind, is the wrong decision that is made denominator of t is the standard error of the
when a test rejects a true null hypothesis. The difference between two means.
Central Limit Theorem significance level of a test denoted by α is equal For significance testing, the degrees of
It can be shown that even when the original to the probability of Type I error. freedom for this test is 2n − 2 where n is the
population is not normal, if we draw samples A type II error, also known as an error of the number of participants in each group.
of n items from it and obtain the distribution of second kind, is the wrong decision that is made Paired t-test,
sample means, we notice that the distribution when a test fails to reject a false null hypothesis. Formula:
of the sample means become more and more The rate of the type II error is denoted by β and
normal as the sample size n increases. This is related to the power of a test (which equals 1-β).
known as central limit theorem. ---------------- Level of significance,
Let X1, X2, . . . , Xn denote n independent The amount of evidence required to accept that
random variables, all of which have the same an event is unlikely to have arisen by chance is Where
PDF with mean = μ and variance = σ2. Let ˉX known as the significance level or critical p-
= _Xi/n (i.e., the sample mean). Then as n value
increases indefinitely (i.e., n→∞), The p-value is the probability of observing data
at least as extreme as that observed, given that
the null hypothesis is true. If the obtained p-value
is small then it can be said either the null Chi-square test for goodness of fit
hypothesis is false or an unusual event has Chi Square is defined as
That is, ˉX approaches the normal distribution occurred. The significance level is usually
with mean μ and variance σ2/n. Notice that denoted by α. Popular levels of significance are
this result holds true regardless of the form of 10% (0.1), 5% (0.05), 1% (0.01), 0.5% (0.005),
the PDF. ------------------------------------------ and 0.1% (0.001). If a test of significance gives a If the critical chi is greater than the tabulated
If we take a samples of n from an arbitrary p-value lower than the significance level α, the chi reject the null. Otherwise do not reject
population and calculate mean, then sampling null hypothesis is rejected. Such results are F test - test for equality of two population
distribution of mean will approach the normal informally referred to as 'statistically significant'. variances.
distribution as the sample size n increases. Critical region, Two-sample F test for equality of variances. F
The central limit theorem states that, given is defined as
certain conditions, the mean of a sufficiently
large number of independent random
variables, each with finite mean and variance,
Where
will be approximately normally distributed

Module 5:-Testing of hypothesis Critical region or region of rejection is the set

Null and alternative hypothesis,
A statistical statement about a population
parameter assumed before taking the sample
for possibel rejection on the basis of outcome
of the sample data is known as a null
hypothesis.
A hypothesis is said to be alternate hypothesis
if it is complementary to null hypothesis.
For instance, a certain drug may reduce the
chance of having a heart attack. Possible null
hypotheses are "this drug does not reduce the
chances of having a heart attack" or "this drug
has no effect on the chances of having a heart
attack". The test of the hypothesis consists of
administering the drug to half of the people in
a study group as a controlled experiment. If
the data show a statistically significant change
in the people receiving the drug, the null
hypothesis is rejected.
Example
of values of the test statistic for which the null
hypothesis is rejected.
Critical value is the threshold value delimiting Arrange so > and reject H0 for critical F
the regions of acceptance and rejection for the greater than tabulated F. ie
test statistic.
Region of acceptance is the set of values of the
Chi Square (Karl Pearson)
test statistic for which we fail to reject the null
It is a statistical technique to test null
hypothesis.
hypothesis for possible rejection.
t Test-for single mean,
If the calculated X2 is greater than the
One-sample t-test
tablulated X2, reject the null
In testing the null hypothesis that the
Uses
population mean is equal to a specified value
• Test of Goodness of fit
μ0, one uses the statistic
• Test of independence of attributes
• Test for population variance
• Test for equality of several
population proportions
where is the sample mean, s is the sample
standard deviation of the sample and n is the t (Student)
sample size. The degrees of freedom used in It is a statistical technique to test null
this test is n − 1. hypothesis for possible rejection.
If the calculated t is greater than the tablulated
t, reject the null
Uses
• Test for single mean
• Test for difference between two
sample means(paired t test)
• Test of an observed sample
correlation coefficient

F (Fisher)
It is a statistical technique to test null
hypothesis for possible rejection.
If the calculated F is greater than the tablulated
F, reject the null
Uses
• Test for equality of several
population means
• Test for equality of population
variances
• Testing significance of an observed
sample correlation ratios
• Testing significance of an observed
sample multiple correlations