Robert A. Donnelly Jr. - Idiots Guides: Statistics

No one likes a know-it-all. Most of us realize theres no such thinghow could there be? The world is far too complicated for someone to understand everything there is to know. So when you come across a know-it-all, you smile to yourself as they ramble on because you know better.

You understand that the quest for knowledge is a never-ending one, and youre okay with that. You have no desire to know everything, just the next thing. You know what you dont know, youre confident enough to admit it, and youre motivated to do something about it.

At Idiots Guides, we, too, know what we dont know, and we make it our business to find out. We find really smart people who are experts in their fields and then we roll up our sleeves and get to work, asking lots of questions and thinking long and hard about how best to pass along their knowledge to you in the easiest, most-accessible way possible.

After all, thats our promiseto make whatever you want to learn As Easy as It Gets. That means giving you a well-organized design that seamlessly and effortlessly guides you from page to page, topic to topic. It means controlling the pace youre asked to absorb new informationnot too much at once but just what you need to know right now. It means giving you a clear progression from easy to more difficult. It means giving you more instructional steps wherever necessary to really explain the details. And it means giving you fewer words and more illustrations wherever its better to show rather than tell.

So here you are, at the start of something new. The next chapter in your quest. It can be an intimidating place to be, but youve been here before and so have we. Clear your mind and turn the page. By the end of this book, you wont be a know-it-all, but your world will be a little less complicated than it was before. And well be sure your journey is as easy as it gets.

Mike Sanders
Publisher, Idiots Guides

Publisher: Mike Sanders

Associate Publisher: Billy Fields

Acquisitions Editor: Jan Lynn

Development Editor: Alexandra Elliott

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Book Designer: William Thomas

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Proofreader: Laura Caddell

Indexer: Tonya Heard

PRODUCTION, LONDON

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First American Edition, 2016
Published in the United States by DK Publishing
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Copyright 2016 Dorling Kindersley Limited
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Published in the United States by Dorling Kindersley Limited.

ISBN: 9781465451668

This digital edition published 2016
eISBN: 9781465454089

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To my wife, Debbie, who supported and encouraged me every step of the way. I could not have done this without you, babe.Bob Donnelly Jr.

To my shining stars, who shine on me and brighten my day, and whom I love endlessly and unconditionally. You are my inspiration and motivation for writing this book.Fatma Abdel-Raouf, PhD

Contents

Foreword

Statistics, statistics everywhere, but not a single word can we understand! Actually, understanding statistics is a critically important skill that we all need to have in this day and age. Every day, we are inundated with data about politics, sports, business, the stock market, health issues, financial matters, and many other topics. Most of us dont pay much attention to most of the statistics we hear, but more importantly, most of us dont really understand how to make sense of the numbers, ratios, and percentages with which we are constantly barraged. In order to obtain the truth behind the numbers, we must be able to ascertain what the data is really saying to us. We need to determine whether the data is biased in a particular direction or whether the true, balanced picture is correctly represented in the numbers. That is the reason for reading this book.

Statistics, as a field, is usually not the most popular topic or course in school. In fact, many people will go to great lengths to avoid having to take a statistics course. Often people think of it as a math course or something that is very quantitative, and that scares them away. Others, who get past the math, do not have the patience to search for what the numbers are actually saying. And still others dont believe that statistics can ever be used in a legitimate manner to point to the truth. But whether it is about significant trends in the population, average salary and unemployment rates, or similarities and differences across stock prices, statistics are an extremely important input to many decisions that we face daily. And understanding how to generate the statistics and interpret them relating to your particular decision can make all the difference between a good decision and a poor one.

For example, suppose that you are trying to sell your house and you need to set a selling price for it. The mean selling price of houses in your area is $250,000, so you set your price at $265,000. Perhaps $250,000 is the price roughly in the middle of several house prices that have ranged from $200,000 to $270,000, so you are in the ballpark. However, a mean of $250,000 could also occur with house prices of $175,000; $150,000; $145,000; $100,000; and $780,000. One high price out of five causes the mean to increase dramatically, so you have potentially priced yourself out of most of the market. For this reason, it is important to understand what the term mean really represents.