Understanding Statistical Analysis: Techniques and Applications

Types of Statistical Analysis

Given below are the 6 types of statistical analysis:

• Descriptive Analysis

Descriptive statistical analysis involves collecting, interpreting, analyzing, and summarizing data to present them in the form of charts, graphs, and tables. Rather than drawing conclusions, it simply makes the complex data easy to read and understand.

• Inferential Analysis

The inferential statistical analysis focuses on drawing meaningful conclusions on the basis of the data analyzed. It studies the relationship between different variables or makes predictions for the whole population.

• Predictive Analysis

Predictive statistical analysis is a type of statistical analysis that analyzes data to derive past trends and predict future events on the basis of them. It uses machine learning algorithms, data mining, data modelling, and artificial intelligence to conduct the statistical analysis of data.

• Prescriptive Analysis

The prescriptive analysis conducts the analysis of data and prescribes the best course of action based on the results. It is a type of statistical analysis that helps you make an informed decision. 

• Exploratory Data Analysis

Exploratory analysis is similar to inferential analysis, but the difference is that it involves exploring the unknown data associations. It analyzes the potential relationships within the data. 

• Causal Analysis

The causal statistical analysis focuses on determining the cause and effect relationship between different variables within the raw data. In simple words, it determines why something happens and its effect on other variables. This methodology can be used by businesses to determine the reason for failure. 

Importance of Statistical Analysis

Statistical analysis eliminates unnecessary information and catalogs important data in an uncomplicated manner, making the monumental work of organizing inputs appear so serene. Once the data has been collected, statistical analysis may be utilized for a variety of purposes. Some of them are listed below:

• The statistical analysis aids in summarizing enormous amounts of data into clearly digestible chunks.
• The statistical analysis aids in the effective design of laboratory, field, and survey investigations.
• Statistical analysis may help with solid and efficient planning in any subject of study.
• Statistical analysis aid in establishing broad generalizations and forecasting how much of something will occur under particular conditions.
• Statistical methods, which are effective tools for interpreting numerical data, are applied in practically every field of study. Statistical approaches have been created and are increasingly applied in physical and biological sciences, such as genetics.
• Statistical approaches are used in the job of a businessman, a manufacturer, and a researcher. Statistics departments can be found in banks, insurance businesses, and government agencies.
• A modern administrator, whether in the public or commercial sector, relies on statistical data to make correct decisions.
• Politicians can utilize statistics to support and validate their claims while also explaining the issues they address.

Benefits of Statistical Analysis

Statistical analysis can be called a boon to mankind and has many benefits for both individuals and organizations. Given below are some of the reasons why you should consider investing in statistical analysis:

• It can help you determine the monthly, quarterly, yearly figures of sales profits, and costs making it easier to make your decisions.
• It can help you make informed and correct decisions.
• It can help you identify the problem or cause of the failure and make corrections. For example, it can identify the reason for an increase in total costs and help you cut the wasteful expenses.
• It can help you conduct market research or analysis and make an effective marketing and sales strategy.
• It helps improve the efficiency of different processes.

Statistical Analysis Process

Given below are the 5 steps to conduct a statistical analysis that you should follow:

• Step 1: Identify and describe the nature of the data that you are supposed to analyze.
• Step 2: The next step is to establish a relation between the data analyzed and the sample population to which the data belongs. 
• Step 3: The third step is to create a model that clearly presents and summarizes the relationship between the population and the data.
• Step 4: Prove if the model is valid or not.
• Step 5: Use predictive analysis to predict future trends and events likely to happen. 

Statistical Analysis Methods

Although there are various methods used to perform data analysis, given below are the 5 most used and popular methods of statistical analysis:

• Mean

Mean or average mean is one of the most popular methods of statistical analysis. Mean determines the overall trend of the data and is very simple to calculate. Mean is calculated by summing the numbers in the data set together and then dividing it by the number of data points. Despite the ease of calculation and its benefits, it is not advisable to resort to mean as the only statistical indicator as it can result in inaccurate decision making. 

• Standard Deviation

Standard deviation is another very widely used statistical tool or method. It analyzes the deviation of different data points from the mean of the entire data set. It determines how data of the data set is spread around the mean. You can use it to decide whether the research outcomes can be generalized or not. 

• Regression

Regression is a statistical tool that helps determine the cause and effect relationship between the variables. It determines the relationship between a dependent and an independent variable. It is generally used to predict future trends and events.

• Hypothesis Testing

Hypothesis testing can be used to test the validity or trueness of a conclusion or argument against a data set. The hypothesis is an assumption made at the beginning of the research and can hold or be false based on the analysis results. 

• Sample Size Determination

Sample size determination or data sampling is a technique used to derive a sample from the entire population, which is representative of the population. This method is used when the size of the population is very large. You can choose from among the various data sampling techniques such as snowball sampling, convenience sampling, and random sampling. 

Statistical Analysis Software

Everyone can't perform very complex statistical calculations with accuracy making statistical analysis a time-consuming and costly process. Statistical software has become a very important tool for companies to perform their data analysis. The software uses Artificial Intelligence and Machine Learning to perform complex calculations, identify trends and patterns, and create charts, graphs, and tables accurately within minutes. 

Statistical Analysis Examples

Look at the standard deviation sample calculation given below to understand more about statistical analysis.

The weights of 5 pizza bases in cms are as follows:

Calculation of Mean = (9+2+5+4+12)/5 = 32/5 = 6.4

Calculation of mean of squared mean deviation = (6.76+19.36+1.96+5.76+31.36)/5 = 13.04

Sample Variance = 13.04

Standard deviation = √13.04 = 3.611

Career in Statistical Analysis

A Statistical Analyst's career path is determined by the industry in which they work. Anyone interested in becoming a Data Analyst may usually enter the profession and qualify for entry-level Data Analyst positions right out of high school or a certificate program — potentially with a Bachelor's degree in statistics, computer science, or mathematics. Some people go into data analysis from a similar sector such as business, economics, or even the social sciences, usually by updating their skills mid-career with a statistical analytics course.

Statistical Analyst is also a great way to get started in the normally more complex area of data science. A Data Scientist is generally a more senior role than a Data Analyst since it is more strategic in nature and necessitates a more highly developed set of technical abilities, such as knowledge of multiple statistical tools, programming languages, and predictive analytics models.

Aspiring Data Scientists and Statistical Analysts generally begin their careers by learning a programming language such as R or SQL. Following that, they must learn how to create databases, do basic analysis, and make visuals using applications such as Tableau. However, not every Statistical Analyst will need to know how to do all of these things, but if you want to advance in your profession, you should be able to do them all.

Based on your industry and the sort of work you do, you may opt to study Python or R, become an expert at data cleaning, or focus on developing complicated statistical models.

You could also learn a little bit of everything, which might help you take on a leadership role and advance to the position of Senior Data Analyst. A Senior Statistical Analyst with vast and deep knowledge might take on a leadership role leading a team of other Statistical Analysts. Statistical Analysts with extra skill training may be able to advance to Data Scientists or other more senior data analytics positions.

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