The Basics...
Statistics and statistical methods are of two basic
types:
Descriptive statistics summarize some facet of a
complete population. They are used when an entire population is small or easy enough to
measure. For example, the average height or weight of everyone in your family is a
descriptive statistic. Because all members of the population are included in the
calculation, the result is a totally accurate, and thus completely reliable, measurement.
Inferential statistics are used to predict or infer
something about a very large population by measuring samples, or subsets, of that
population. This is done when it is virtually impossible, or prohibitively expensive, to
obtain data about all members of a particular population.
Many of the statistics we normally come in contact with while
reading the paper, watching TV, or talking to colleagues are of the inferential variety.
Examples include the number of people projected to carry the HIV virus in 1998, the
average growth rate of maple trees, and the odds of incurring a side effect when taking a
new drug.
These types of statistics are thus used to make farreaching
policy decisions regarding everything from the number of street lights needed per city
block, to the level of funding allocated to school lunch programs, to the amount of money
spent to protect the grizzly bear population of the Western United States. Thus, it is
critical that we develop a good understanding of how best to use, and not abuse,
inferential statistics.
Key Concepts...
Proportion
The concept of proportion allows us to compare relative differences in size, quantity,
etc. between or within samples. The emphasis is on relative, because we don't know
the absolute difference or the magnitude of that difference.
Proportion can be measured as a...
...ratio. If there are 10 girls and 5 boys in the
choir, the ratio of girls to boys is 2 to 1.
...percentage. The choir can also be described as 67%
female and 33% male.
Percentages also play a major role when trying to determine
the "odds" that an event might happen. If it is discovered that 7 out of 10 mice
are brown, we can infer that a.) 70% of mice are brown, or that b.) there is a 70% chance
that the next mouse we see will be brown. This idea leads us nicely into the concept
of....
Probability
When it comes to statistics, the term probability is used to describe...
...the likelihood that an event will or will not happen.
(There is a 90% probability that it will rain tomorrow.)
...the degree of certainty regarding the relationship of
two or more variables. (90% of a tree's growth rate can be explained by the amount of
rainfall received during the spring and summer months.)
...the level of confidence that what you think is real
actually is real. (We are 90% certain that half of the children that will be
born next year will be female.)
Sample Size
Generally speaking, the larger the sample size, the higher the level of probability that
the statistics actually mean what they say they mean. For example, using a sample of 10
people to draw inferences about the behaviors of a million people is not a smart thing to
do, since there is only a small probability that the sample is representative of the whole
population. However, a sample of 300 may be more than adequate to allow for statistically
sound inferences.
Watch out when samples that are of
reasonable size become subdivided. This situation occurs fairly frequently when
analyzing survey results, as there is a tendency to learn as much as possible about very
specific (but usually very small) subsamples. This type of analysis is usually referred
to as a "crosstabulation."
Example:
Say that out of 300 people asked about their eating habits, 15 indicate that they are
vegetarians. From this we can reasonably infer that about 5% of the population eats no
meat. (So far, so good.)
What if we ask those 15 vegetarians to name their favorite
sport and 60% say "soccer." Does this mean that most vegetarians prefer soccer?
No! We only asked 15 people, a sample size that is far too small to give a reliable
result. To make this claim, we would have to start again by asking the question of enough
vegetarians (at least 100) that we could be reasonably sure that the answer we received
was projectable to all vegetarians.
Randomness
All samples are not created equal. Generally, the fairest way to generate a sample
is to do so randomly, letting the laws of probability spin their magic. Random samples of
a large enough size will do a surprisingly nice job of modeling a large population.
Sometimes nonrandom samples make sense, especially when
trying to draw inferences about specific population subgroups (e.g., Americans of Irish
heritage or fruit flies that were born with an extra pair of wings). But
be careful of their use, especially when reviewing advertising claims. The use of
nonrandom samples to "stack the deck" is a favorite trick of unscrupulous
advertisers.
Example: A
car manufacturer will claim in big letters that its new model is preferred over a
competing model. It's only in the small print that we find out that the study was
conducted among a specific sample: First time buyers over the age of 65. Thus, the results
are projectable only among the portion of the population that has never bought a car but
has filed for Social Security.
Reliability
When working with inferential statistics, it is important to remember that the numbers are
approximations of what the total population is like, not numbers describing the total
population itself (unless, of course, the sample IS the population). They are thus subject
to some amount of error, leading to a need to express their degree of reliability.
One way to do so is through the concept of sampling error.
For example, if a survey is said to include a sampling error of +/ 3 points, it means
that any quoted figure could actually be 3 points above or 3 points below that figure. So
if a study infers that 10% of the population has 12 toes, a more accurate description is
that "the percent of people with 12 toes falls between 7 and 13%." While this
answer is less precise, it is certainly more accurate!
Another way that reliability is presented is as a percentage.
A Confidence Level of 95% indicates that there is a 95% probability that the number quoted
is in fact the actual number that would be found by studying the entire population.
Traditionally, differences that occur at the 95% Confidence Level are considered to be significant,
and those at the 99% level are considered to be very significant.
It is very important to know the
reliability factor when comparing two different pieces of information. Let's say
that you are conducting a long term study designed to measure the male/female proportion
among silver foxes. If the percentage of males changes from 50 to 52%, should you note an
increase? The answer is "yes", but only if differences of 2 or more points are
considered meaningful (statistically significant). Otherwise, you can only claim a
directional increase, which technically is no increase at all.
This concept of statistical significance is rarely discussed
in enough detail when surveys are presented by the media, industry and special interest
groups. Since it is only natural for a group to present data in the best possible light,
it is extremely important to be able to assess the value of both the raw numbers and the
findings drawn from them. Statistical significance is an excellent way to do so.
Independence
This is one of the most misunderstood concepts in all of statistics and the reason why
otherwise smart people will consistently bet (and lose) on the lottery. Let's start with a
coin. If you flip it, the odds of having it land headsup are 50%. So if you flip the coin
and it comes up tails, what are the odds that it will come up heads the next time? It's
fairly obvious that the odds remain at 50% because each coin toss is an independent
event, unaffected by the previous toss.
The independent nature of coin tosses is easy to understand.
But what about the chances of winning while playing the lottery? If the numbers 3,5,7 came
up today, does that mean you should do what most people do and not bet on them tomorrow?
Not at all! Each day's drawing is an independent event, just like a coin toss. Thus, the
odds of drawing 3,5,7 tomorrow are the same as they were today.
Absolute vs. Relative Change
Should you be frightened to learn that the number of airplane accidents doubled between
1995 and 1996? Maybe, but you'd probably feel differently if the number went from only 1
to 2 than if it increased from 500 to 1000.
Or, should you be alarmed if the concentration of a certain
toxic chemical in the water supply tripled? Probably "no" if it went from 1 part
per trillion to 3 parts per trillion, but probably "yes" if it went from 1000
parts per million to 3000 parts per million. Thus, it is always important to view
relative change in an absolute context, and vice versa.
Not looking at both relative and
absolute differences leaves us ripe for being manipulated. For example, if the
incidence of skin cancer in a sample increased from 2% to 3%, optimists might say it only
went up by 1% (absolute), while pessimists would argue that it jumped by 50% (relative). Both
are right! That's why you have to see the actual before and after percentages, not
just the changes.
By the way, relative effects are far more exaggerated at the
small end of the spectrum than in the middle: A two percentage point increase from 2 to 4%
is a 100% relative gain, but a two percentage point increase from 50 to 52% is only a 4%
relative gain! That's another good reason to always look at the numbers that are changing
and not just the changes themselves.
Measurement Tools...
Frequency
Distributions
As any carpenter will tell you, it's critical to match the tool to the job. The same goes
for statistics. Before you can choose the right way to measure data, you have to examine
the way that the data distributes itself. There are three frequency patterns that account
for a very large percentage of sample distributions:
Normal Distribution
A common frequency distribution that characterizes many human and biological phenomena is
called the normal distribution. This type of distribution describes a population in
which the majority of score values occur in a central
"average" range. The frequency of other scores is the same above and below the
average, with fewer and fewer scores occurring as one looks farther from the center. This
type of distribution is the familiar bell curve.Example: Using the test scores from a
biology test as an example, the horizontal axis represents the actual scores the students
achieved, and the vertical axis represents the frequency with which each particular score
occurred. (By the way, the "curve wrecker" who made all of our lives miserable
in high school had a score at the far right of the horizontal axis!)
Skewed Distribution
Like a normal distribution, a skewed distribution describes a population in which
the majority of score values occur within an average range. However, unlike the normal
curve, the minority scores in a skewed curve are unequally divided among the possible higher and lower values outside the average
range. The curve that's created looks like a mountain that falls off sharply to one side
and more gradually to the other.Example:
Let's say you decide to analyze sales of ball point pens. You would probably find that
most of them were fairly inexpensive, since they were made to be disposable. But there
were still quite a few that were fairly costly (silver plated barrels) and a few that were
downright expensive (gold barrels). By graphing pens by price, you'd find a frequency
distribution that skewed toward the large volume inexpensive items and then tailed off
toward the expensive types.
Bimodal Distribution
Some score patterns have two (or more) central clusters, rather than one. When graphed,
they look like two bell curves next to each other. In fact, in many cases, they are!Example: Measuring the heights of a sample of people will
produce a bimodal distribution  one cluster for men and one for women. If instead you
measure height separately by sex, the results will be two normal distributions. Thus, a
bimodal frequency distribution may be a sign that what is being measured as one group
should really be reconsidered as two separate populations.
Averages
Next, we have to examine the way in which scores cluster within these distributions. A
mathematical device frequently used to do so is the measure of central tendency, commonly
known as the average.
Much of the time we use what's known as the "arithmetic
average," which is found by adding up all of the scores in a sample and dividing by
the number of scores. The statistical term for this commonly used and widely understood
measurement is the mean. However, the mean is only one of five types of average
that may need to be calculated and analyzed. Most of the time, we only need to concern
ourselves with three:
The mean is the arithmetic average, found by adding up
all the scores and dividing by the number of scores. In many cases, the mean is a
perfectly suitable measure. But when there are extreme values in the distribution, the
mean starts to lose its luster.
The median is the value in a sample that cuts the
sample into two equal parts: an equal number of scores are above it, and an equal number
are below it. Unlike the mean, the median is more concerned with the total number of
scores, rather than with their values.
The mode is the score that occurs most often in a
frequency distribution. It is not used much in scientific work, but pops up on TV when you
see "person on the street" interviews: ("We asked five people if they like
spaghetti. Three said yes, two said no. Thus, the average person likes spaghetti.")
When looking at a normal distribution, all three averages
provide the same result: The mean, median and mode all represent the arithmetic average,
the score in the middle of the distribution and the score that occurs the most frequently.
It's when distributions are not bell shaped that we have to be careful.
Example: Household
income distributions tend to be skewed toward the lower end of the scale. However, there
are a relatively few households with ENORMOUS incomes. When looking at the mean, these
very few households will produce an average that is rather high and doesn't really present
a true picture of the typical household.
The median, on the other hand, will produce a more accurate
and somewhat lower income picture, as it examines the distribution of scores without
regard to their value. (This is why you generally hear the term median income, rather than
mean income.)
Thus, beware of the term
"average!" Always try to find out something about the distribution and
whether or not average refers to the mean, median or mode. If the distribution is normal
(bell curve), the mean is generally the preferred measure, although any of the three will
do. If the distribution is skewed, the median is probably the better choice. In the
case of skewed distributions, substitution of the mean for the median should make you
suspicious.
Standard Deviation
Although it sounds complex, the concept of standard deviation is actually fairly simple:
How far from the mean do the scores actually fall? Obviously, the tighter that a group of
scores clusters around the mean, the easier it is to make accurate predictions about the
value of additional scores. Thus, samples with lower standard deviations provide more
reliable and predictable data than samples with higher standard deviations. For this
reason, the standard deviation is one of the most important concepts in all of statistics.
Example:
Start with two numbers: 1 and 99. Their mean score is 50 (1 + 99 divided by 2). The
deviation of each of these numbers from the mean is 49 (1 is 49 less than 50; 99 is 49
greater than 50). This indicates that the range in which you can safely predict where
another score might fall is huge: 98, or 49 units below 50 and 49 units above 50.
On the other hand, start with the numbers 49 and 51. Their
mean score is also 50, but each of their deviations from it is only 1! Thus, the
predictive range is 2  1 unit below 50 to one unit above 50.
In more concrete terms, what if you were William Tell and had
to pick one of two archers to shoot the apple on top or your son's head? By holding a
contest and reviewing the scores, you note that both archers put 4 out of 6 arrows in the
bull's eye. Archer A put the other two at the far end of the target and at opposite sides
from each other. Archer B put the other two just outside the bull's eye, right next to
each other.
If you're fairly sane, you'd choose Archer B, because her
arrows all fell in a nice tight cluster. In statistical terms, her scores would have a
lower standard deviation, meaning that her chances of putting an arrow where she wanted to
put it were better than what you could expect from Archer A.
Coefficient of Correlation
This measure helps us determine the strength and direction of a relationship between two
variables. The Coefficient of Correlation ranges between 1.00 (perfect negative
correlation) to 0.00 (no correlation) to +1.00 (perfect positive correlation). An example
of a negative correlation is the relationship of helmets to deaths caused by motorcycle
accidents: the more that helmets are worn, the fewer the resulting accidental deaths. A
positive correlation would be the amount of rainfall in a given year and average tree
growth.
Correlations can be powerful tools, but need to be considered
carefully because...
...they don't necessarily indicate causality, but
rather the presence of a relationship. While we know intuitively that rainfall causes tree
growth, we can't say for sure whether depression causes alcoholism or alcoholism causes
depression. But we do know that the two are correlated.
...strong mathematical correlations may not actually mean
a relationship exists. For example, the cost of buying a new home has risen
dramatically over the last few years, as has the cost of breakfast cereal. Would you be
willing to believe that a strong relationship exists between the two?
Remember, correlations are mathematical constructs with
mathematical meanings. Thus, there is always the chance that they do not accurately
describe realworld relationships. When in doubt, fall back on one of the best tools at
your disposal: common sense!
A Few Good Examples...
Election Campaigns
As you watch the news on TV, the latest election poll results are announced. The reporter
remarks on the fact that "Candidate Brilton is pulling away from his adversary."
Behind her, this chart flashes up on the screen:
Approval Ratings (%) 
Candidate 
Last
Week 
This
Week 
Change 
Rob Mole 
35 
34 
1 
Clint Brilton 
53 
55 
+2 
Russ Moreau 
8 
8 
0 
Undecided 
4 
3 
1 
Sampling error is +/ 3
points. 
At first glance, the reporter seems right:
Brilton's score looks as if it increased by 2 points, while Mole's declined by 1 point.
But the small print at the bottom of the chart tells a different story. Because the
standard error is +/ 3 points, any change equal to or less than 2 points is really no
change at all. Thus, the candidate's ratings didn't truly change at all.
Canvassing for Donations
As treasurer of Citizens for A Better Society (CABS), you are in charge of neighborhood
fundraising efforts. Past efforts have shown that the odds of receiving donations go down
to practically zero if home prices fall below $100,000. Further, it doesn't seem to matter
how much more than $100,000 the house is worth, only that it costs more than this
apparently magic number. You send out three trusty lieutenants to find the best
neighborhood. They come back with the following results:
 Neighborhood A: Average (mean) home price: $125,000
 Neighborhood B: Average (mean) home price: $130,000
 Neighborhood C: Average (mean) home price: $140,000
Based on the above, your aides immediately opt to begin
canvassing Neighborhood C. You're not sure, and ask them to show you their data. After
compiling it and doing a few simple calculations, you come up with this chart:
Home Values for Neighborhood:
($000) 
A 
B 
C 
90 
70 
60 
100 
70 
60 
110 
80 
70 
110 
80 
80 
120 
80 
80 
130 
90 
170 
140 
90 
180 
140 
200 
210 
150 
200 
240 
160 
340 
250 
Mean=125 
Mean=130 
Mean=140 
Median=125 
Median=85 
Bimodal!
Mean 1= 70
Mean 2= 210 
Now, the situation looks very
different. Neighborhood C is really two very different neighborhoods, with an equal group
of high and low value homes. The total number of homes worth over $100,000 is five.
Next, you look at Neighborhood B, which has the second
highest mean home value. But the results have been skewed by the fact that their are a few
very expensive homes and many more modest ones. Thus, the median tells a truer story for
this group, since at $85,000 it is more representative of the entire neighborhood. In
fact, only three homes are worth over $100,000.
Finally, you examine Neighborhood A. Even though it has the
lowest mean of the three, it has the most number of homes worth over $100,000 (9 out of
10). Since both the mean and the median are the same, the distribution should be more
centrally clustered and less skewed, which in fact turns out to be the case.
Your conclusion? Go with Neighborhood A, which has the lowest
mean but the largest number of homes that fit your criteria.
Buying A New Car
After thoroughly testing a number of cars, you have narrowed the decision down to either a
new Flotsam or Jetsam. You call the dealers and ask about consumer satisfaction ratings
for their specific car.
The Flotsam dealer tells
you that his car has seen the biggest jump in customer satisfaction ever recorded by the
Powerless Company, which specializes in these surveys. In fact, he says, there's no need
to even call the Jetsam dealer. Since the Flotsam satisfaction number jumped by 20 points
and the Jetsam number didn't change in the last year, the choice is obvious.
Not quite convinced, you hang up and call the Jetsam dealer.
Yes, she says, the Flotsam number did go up by 20 points  from an approval rating
of 23% to one of 43%. And yes, the Jetsam number didn't change  it stayed the same at
its old level of 96%.
Which car would you choose? Once you can look at both the
absolute and relative numbers, your decision may change.
Summary...
A basic understanding
of statistics is a critical component of informed decision making.
Statistical concepts are not hard to master, and mastery will help ensure accurate use,
and minimum misuse, of the large quantity of numerical information that confronts us every
day.
Here is a simple table that you can refer to when thinking
about statistics:
Statistics Crib Sheet
Here is a list of 10 questions to always ask when confronted with
statistics:
 Was the study performed by a reputable, third party research
organization?
 When was the study conducted and for whom?
 Is the sample size large enough to be projectable?
 Was the sample selected randomly? If not, is there a good reason?
 If "the average" is discussed, is it clear which one (mean,
median, mode) is being used and why?
 Are confidence limits and sampling errors clearly indicated?
 Can you get a feel for both absolute and relative changes? Over what
time period?
 Do the cited correlations make sense?
 Do the conclusions drawn by the study hold up in light of the
questions listed above?
 Are other similar studies cited? Are the results compared and
comparable to the findings from the current study?

References On the Net...
 Chance Database,
a multiinstitutional effort to foster critical thinking about news and current events
 Hyperstat,
at Rice University
References Off the
Net...
(Clicking on the link will take you to the
appropriate catalog page of Amazon.com, where you can learn more about the book and/or
order it.)
 Full House:
The Spread of Excellence from Plato to Darwin, Stephen Jay Gould (Random House,
1997).
 How to Lie
with Charts, Gerald E. Jones (SYBEX, 1995).
 How to Lie
with Statistics, Darrell Huff (W. W. Norton, 1993).
 How to Think
About Statistics, John L. Phillips (W. H. Freeman and Company, 1988).
 Introduction
to Probability, John E. Freund (Dover Publications, 1973).
 Introduction
to Statistical Analysis and Inference for Psychology and Education, Sidney J.
Armore (Krieger Publishing Company, 1983).
 Statistics
without Tears, Derek Rowntree (MacMillan, 1982).
 Statistics
Concepts and Controversies, David S. Moore (W H Freeman and Company, 1996)
 Statistical
Deception at Work, John Maura (Lawrence Erlbaum Associates, 1992).
 Tainted Truth,
Cynthia Crossen (Simon & Schuster, 1994).