Ch 2.1 Data and Decision Making

Observational data

-Data that we routinely encounter and do not involve experimentation -the data described are often collected to satisfy state and government regulation as well as for business purposes, such as to examine trends in a particular stock price or interest rates.

fuzzy concepts

-Fuzzy concept definitions produce fuzzy measurements -ex: strength, love, rivalry, and prejudice -these concepts are fuzzy because they are perceptions

example of response and explanatory variable

-Response Variable: Students' grades in the finance course. -Explanatory Variable: Whether students take statistics before finance.

explanatory variable

-a variable that affects the variable of interest (response variable) in an experiment -causes or explains changes in a response variable

In a controlled experiment

-the control group is the group of subjects that does not receive the treatment; -the experimental group is the group of subjects that receives the treatment; -treatment is the factor that changes the level of the explanatory variable

response variable

-the variable of interest in an experiment -measures the outcome of interest in a study

The Decision-Making Method procedure

1. Clearly define the problem and any influential variables. 2. Decide upon objectives and decision criteria for choosing a solution. 3. Create alternative solutions. 4. Compare alternatives using the criteria established in the second step. 5. Implement the chosen alternative. 6. Check the results to make sure the desired results are achieved.

scientific method procedure

1. Gather information about the phenomenon being studied. 2. On the basis of the data, formulate a preliminary generalization or hypothesis. 3. Collect further data to test the hypothesis. 4. If the data and other subsequent experiments support the hypothesis, it becomes a law. If the experiment does not support the hypothesis, construct a new hypothesis and start the method over again. Sometimes, even if the hypothesis is supported, you may want to test it again but in a different way.

Steps to Consider When Conducting a Survey

1. Have specific goals. 2. Consider alternatives for collecting data. 3. Select samples to represent the population. 4. Match question wording to the concepts being measured. 5. Pretest questionnaires. 6. Construct quality checks. 7. Use statistical analysis and reporting techniques. 8. Disclose all methods used to conduct the survey.

Do we have good measurements?

1. Is the concept under study adequately reflected by the proposed measurements? 2. Are the data measured accurately? 3. Is there a sufficient quantity of the data to draw a reasonable conclusion?

2 ways to obtain data

1. observation 2. controlled experiments

Double blind studies

A study in which the subjects are not told whether they are members of the experimental group or the control group and the evaluators are also not told whether their subjects are members of the experimental or control group

A technology company decided to change the amount spent on marketing on the two social media sites, Tumblr and Twitter, to determine the effect on their referral traffic. Their original strategy was to split the budget 50/50 and market to both media sites equally. They switched their strategy to only spend 25% of their marketing budget on Tumblr and 75% on Twitter. After switching to the new strategy and collecting data for two months, they found that the referral traffic increased with the new marketing strategy. Identify the response and explanatory variables.

Response variable: Referral traffic Explanatory variable: Budget strategy

placebo

a fake treatment that contains none of the drug being tested

Simpson's Paradox

a phenomenon in statistics in which an effect or trend appears in several different groups of data when considered separately but disappears or reverses when the groups are combined.

Confounding Variable

a variable that was not controlled or accounted for by the researcher and thus damaged the integrity of the experiment

completely randomized design

an experimental design in which experimental units are randomly assigned to two or more different treatments

Specify which of the following variables are not well-defined

cold beauty hot tall

A company did a study on the physical activity level and weight gain of its employees. Age was not considered so it might be an example of a(n) .

confounding variable

In a controlled experiment the researcher attempts to

control the environment of the experiment so that the effect of one variable on another can be isolated and measured.

Inferential Statistics

develops theories to test the hypothesis using data collected from an experiment and makes formal conclusions about a population or parameter USING DATA FROM EXPERIMENT

An experiment in which neither nurses nor partakers know whether the partaker will receive a treatment is

double blind

Causal factors

factors or variables that influence the response variable

Descriptive Statistics

focuses on exploratory methods for examining data that help to FORMulate a hypothesis GUESS ex: student income

placebo effect

he belief that the subject improves (or has a reaction to the placebo) when they haven't received the treatment

Determine whether an observational or experimental study is appropriate to address the following statement. A car wash operator wants to study whether customers are satisfied with the service they receive.

observational

all surveys produce

observational data

Census data are

observational; they are a measure of how things are in a specific geographic area at a given point in time

A farmer experiments with different amounts of fertilizer in a cornfield to determine which amount results in higher yields. Corn yield would be considered the

response variable

A researcher wants to know if there is a relationship between the amount of an anti-nausea drug given and the time for the patient to feel better. The time for the patient to feel better would be considered the

response variable

Specify which of the following variables are well-defined

temp weight distance

bias

the tendency to overestimate or underestimate the value of a certain parameter.

Researchers are investigating a gluten-free diet. There is a group of people who they will monitor that they have told to eliminate any gluten from their diet.

treatment group