Lecture Data ans statistics Applications in Business and Economics

Statistical Studies
Sometimes the data needed for a particular application are not available through existing
sources. In such cases, the data can often be obtained by conducting a statistical study. Statistical
studies can be classified as either experimental or observational.
In an experimental study, a variable of interest is first identified. Then one or more other
variables are identified and controlled so that data can be obtained about how they influence
the variable of interest. For example, a pharmaceutical firm might be interested in conducting
an experiment to learn about how a new drug affects blood pressure. Blood pressure is the
variable of interest in the study. The dosage level of the new drug is another variable that
is hoped to have a causal effect on blood pressure. To obtain data about the effect of the
new drug, researchers select a sample of individuals. The dosage level of the new drug is
controlled, as different groups of individuals are given different dosage levels. Before and
after data on blood pressure are collected for each group. Statistical analysis of the experimental
data can help determine how the new drug affects blood pressure.
Nonexperimental, or observational, statistical studies make no attempt to control the
variables of interest. Asurvey is perhaps the most common type of observational study. For
instance, in a personal interview survey, research questions are first identified. Then a questionnaire
is designed and administered to a sample of individuals. Some restaurants use observational
studies to obtain data about customer opinions on the quality of food, quality of
service, atmosphere, and so on. Acustomer opinion questionnaire used by Chops City Grill
in Naples, Florida, is shown in Figure 1.4. Note that the customers who fill out the questionnaire
are asked to provide ratings for 12 variables, including overall experience, greeting
by hostess, manager (table visit), overall service, and so on. The response categories of
excellent, good, average, fair, and poor provide categorical data that enable Chops City Grill
management to maintain high standards for the restaurant’s food and service.
Anyone wanting to use data and statistical analysis as aids to decision making must be
aware of the time and cost required to obtain the data. The use of existing data sources is
desirable when data must be obtained in a relatively short period of time. If important data
are not readily available from an existing source, the additional time and cost involved in
obtaining the data must be taken into account. In all cases, the decision maker should
consider the contribution of the statistical analysis to the decision-making process. The cost
of data acquisition and the subsequent statistical analysis should not exceed the savings
generated by using the information to make a better decision.