Fundamentals of Data Analysis

1. Fundamentals of Data Analysis

2. Four Types of Data • Alphabetical / Categorical / Nominal data: • Information falls only in certain categories, not in-between categories • No inferences possible between groups except that one group may contain more / less observations than the other • Only reporting frequencies, percentages and mode makes sense (descriptive statistics) • Chi Square measure of Association (inferential Statistics) • Examples: gender, age groups, income groups, etc.

3. Four Types of data • Rank order data: • Ranked according to some logic, e.g. preference, etc. • Again an in-between rank does not make sense. • Difference between say rank 1 and 2 need not necessarily be of the same magnitude as the difference between rank 3 and 4. • Only reporting frequencies, percentages and mode makes sense (descriptive statistics); Spearman Rho coefficient of correlation (Inferential statistics) • Examples: brand preferences, class rank on test, etc.

4. Four Types of data • Interval Level • Numerical data in which the numbers denote the amount of presence / absence of a trait. • zero point does not necessarily mean complete absence of the trait • In-between numbers make sense • Magnitude of difference between numbers on the scale is constant. • All descriptive and inferential statistics possible • Examples: attitude, satisfaction, temperature, etc.

5. Four Types of data • Ratio level data • Interval level data with a meaningful zero point meaning complete absence of the trait • Magnitude of the difference between numbers of the scale is constant AND the zero point denotes complete absence of the trait being measured. • All descriptive and inferential statistics possible • Examples: sales, profits, weight, height, etc.

6. Type of data?

7. Preparing the Data for Analysis • Data editing – the process of identifying omissions, ambiguities and errors in the responses • Coding – process of assigning numerical values to responses according to a pre-defined system • Statistically adjusting the data – the process of modifying the data to enhance its quality for analysis • Weighting, transformations, variable re-specification

8. Preparing the Data for Analysis Problems Identified With Data Editing • Omissions – some unanswered questions • Ambiguity – illegible response, choosing two boxes when only one has to be chosen • Inconsistencies – logically inconsistent response • Lack of Cooperation – checking the same response regardless of the question • Ineligible Respondent – ignoring a filter question

9. Preparing the Data for Analysis • Solutions to such problems • Contact the respondent again and make corrections • Throw out the whole questionnaire as unusable • Disregard questions with missing values in the analysis • Code illegible or missing responses as ‘don’t know’ • Compute missing values on the basis of means

10. Preparing the Data for Analysis Coding • closed-ended questions • Relatively simple and straightforward • open-ended questions • Define all possible responses and categorize each response and then assign a numerical code • If judgment calls are needed then have several coders do the same task and check inter-coder reliability

11. Statistical adjustment of data • Weighting – • process of enhancing / reducing the importance of certain data by assigning a number • Usually done to increase the representativeness of the sample or achieve study objectives • E.g. a sports drink survey would weigh younger respondents higher than older respondents • Scale transformations • Manipulation of scales to make them comparable with other scales e.g. converting lbs to kgs. etc. • Z-scores (standardized scales)

12. Preparing the Data for Analysis • Variable Re-specification • Existing data modified to create new variables • Large number of variables collapsed into fewer variables • Creates variables that are consistent with research questions • Determine if the variable is categorical, rank-order, interval level or ratio level.

13. Categorical Data Analysis - Objectives • Describing the sample distribution for the variable (e.g. gender) • Frequencies, percentages, quartiles, percentiles, graphs (bar, line, histogram, pie) • What are the typical characteristics of the sample? • Mode • Does the categorical variable bear any relationship with a distribution of another categorical variable (e.g. gender w.r.t. buy the product or not) • Cross tabs and chi-square as a measure of association

14. Cross tabulations – example – buyers by age Distribution of customer types by age: If there were no differences between age groups, then each age group’s distribution would have matched the distribution for the total sample.

15. Crosstabs - conclusions • The 25-34 yrs. Group is least likely to be first time buyers than the sample average • The under 18 year group is more likely to be a brand loyal than the sample average

16. Rank order data analysis - Objectives • What are respondent preferences amongst several competing alternatives? (e.g. rank your preferences amongst ten different brands of cars) • Frequencies, Percentages, Graphs • What is the typical preference pattern in the sample (e.g. which car does the sample prefer the most and which one the least?) • Mode

17. Rank order data analysis - Objectives • Are two sets of respondent preferences correlated? (e.g. wrist watches brand preferences with car brand preferences) • Spearman’s rank correlation coefficient

18. Interval level / Ratio level data analysis - Objectives • What is the average response in the sample (e.g. what is the mean attitude to the brand?) • Mean / Median • What is the average variability of the response in the sample (e.g. On an average, how dispersed are the sample’s attitudes to the brand from the mean?) • Standard deviation

19. Interval level / Ratio level data analysis - Objectives • Do two or more subgroups in the sample differ from each other on the response / differ from a previously known / hypothesized value • E.g. do males like the brand significantly more than the females? (t tests, z tests) • E.g. Does attitude to WU vary by student status (freshman, sophomore, junior, senior) • ANOVA

20. Interval level / Ratio level data analysis - Objectives • Are sample responses on two variables correlated? (e.g. are sales related to the advertising expenditure?) • Pearson correlation • Can we determine the value of the sample’s response on a variable, if we know the value on another variable? (e.g. If we need to achieve 1 million dollars in sales next year, how much should we spend on advertising?) • Regression analysis