Principles of Managerial Statistics and Data Science

1Statistics Suck; So Why Do I Need to Learn About It?

1.1 Introduction

The question is a fair one, considering how many people feel about the subject. In this chapter, we go over some interesting aspects of the topic to convince the reader of the need to learn about statistics. Then we provide a formal definition.

Statistics Are All Around Us

Nowadays, we see and hear about statistics everywhere. Whether it is in statements about the median student loan amount of college students, the probability of rain tomorrow, association between two financial variables, or how an environmental factor may increase the risk of being diagnosed with a medical condition. These are all brief examples that rely on statistics. Information extracted from data is so ubiquitous these days that not understanding statistics limits our comprehension of the information coming to us. Therefore, understanding the main concepts from statistics has become imperative. In the world of business, making decisions based on evidence leads to a competitive advantage. For example, retailers can use data from customers to determine appropriate marketing campaigns, and manufacturing experiments can help establish the best settings to reduce costs. Investors can combine assets according to an adequate expected return on investment with an appropriate risk. We go over some specific applications of statistical methods in business in Section 1.2.

The Importance of Understanding the Concepts

Suppose you are invited ...