Descriptive and Inferential Statistics
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Statistics can be broken into two basic types.
The first is known as descriptive statistics. This is a set of methods to describe data that we have collected.
Ex. Of 350 randomly selected people in the town of Luserna, Italy, 280 people had the last name Nicolussi. An example of descriptive statistics is the following statement :
"80% of these people have the last name Nicolussi."
Ex. On the last 3 Sundays, Henry D. Carsalesman sold 2, 1, and 0 new cars respectively. An example of descriptive statistics is the following statement :
"Henry averaged 1 new car sold for the last 3 Sundays."
These are both descriptive statements because they can actually be verified from the information provided.
The second type of statistics in inferential statistics. This is a set of methods used to make a generalization, estimate, prediction or decision.
Ex. Of 350 randomly selected people in the town of Luserna, Italy, 280 people had the last name Nicolussi. An example of inferential statistics is the following statement :
"80% of all people living in Italy have the last name Nicolussi."
We have no information about all people living in Italy, just about the 350 living in Luserna. We have taken that information and generalized it to talk about all people living in Italy. The easiest way to tell that this statement is not descriptive is by trying to verify it based upon the information provided.
Ex. On the last 3 Sundays, Henry D. Carsalesman sold 2, 1, and 0 new cars respectively. An example of inferential statistics are the following statements :
"Henry never sells more than 2 cars on a Sunday."
Although this statement is true for the last 3 Sundays, we do not know that this is true for all Sundays.
"Henry is selling fewer cars lately because people have caught on to his dirty tricks."