Basics of Statistics

Descriptive Statistics

"True" Mean and Confidence Interval. Probably the most often used descriptive statistic is the mean. The mean is a particularly informative measure of the "central tendency" of the variable if it is reported along with its confidence intervals. As mentioned earlier, usually we are interested in statistics (such as the mean) from our sample only to the extent to which they can infer information about the population. The confidence intervals for the mean give us a range of values around the mean where we expect the "true" (population) mean is located (with a given level of certainty, see also Elementary Concepts). For example, if the mean in your sample is 23, and the lower and upper limits of the p=.05 confidence interval are 19 and 27 respectively, then you can conclude that there is a 95% probability that the population mean is greater than 19 and lower than 27. If you set the p-level to a smaller value, then the interval would become wider thereby increasing the "certainty" of the estimate, and vice versa; as we all know from the weather forecast, the more "vague" the prediction (i.e., wider the confidence interval), the more likely it will materialize. Note that the width of the confidence interval depends on the sample size and on the variation of data values. The larger the sample size, the more reliable its mean. The larger the variation, the less reliable the mean (see also Elementary Concepts). The calculation of confidence intervals is based on the assumption that the variable is normally distributed in the population. The estimate may not be valid if this assumption is not met, unless the sample size is large, say n=100 or more.
Shape of the Distribution, Normality. An important aspect of the "description" of a variable is the shape of its distribution, which tells you the frequency of values from different ranges of the variable. Typically, a researcher is interested in how well the distribution can be approximated by the normal distribution (see the animation below for an example of this distribution) (see also Elementary Concepts). Simple descriptive statistics can provide some information relevant to this issue. For example, if the skewness (which measures the deviation of the distribution from symmetry) is clearly different from 0, then that distribution is asymmetrical, while normal distributions are perfectly symmetrical. If the kurtosis (which measures "peakedness" of the distribution) is clearly different from 0, then the distribution is either flatter or more peaked than normal; the kurtosis of the normal distribution is 0.

More precise information can be obtained by performing one of the tests of normality to determine the probability that the sample came from a normally distributed population of observations (e.g., the so-called Kolmogorov-Smirnov test, or the Shapiro-Wilks' W test. However, none of these tests can entirely substitute for a visual examination of the data using a histogram (i.e., a graph that shows the frequency distribution of a variable).

The graph allows you to evaluate the normality of the empirical distribution because it also shows the normal curve superimposed over the histogram. It also allows you to examine various aspects of the distribution qualitatively. For example, the distribution could be bimodal (have 2 peaks). This might suggest that the sample is not homogeneous but possibly its elements came from two different populations, each more or less normally distributed. In such cases, in order to understand the nature of the variable in question, you should look for a way to quantitatively identify the two sub-samples.

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Correlations

Purpose (What is Correlation?) Correlation is a measure of the relation between two or more variables. The measurement scales used should be at least interval scales, but other correlation coefficients are available to handle other types of data. Correlation coefficients can range from -1.00 to +1.00. The value of -1.00 represents a perfect negative correlation while a value of +1.00 represents a perfect positive correlation. A value of 0.00 represents a lack of correlation.

The most widely-used type of correlation coefficient is Pearson r, also called linear or product- moment correlation.
Simple Linear Correlation (Pearson r). Pearson correlation (hereafter called correlation), assumes that the two variables are measured on at least interval scales (see Elementary Concepts), and it determines the extent to which values of the two variables are "proportional" to each other. The value of correlation (i.e., correlation coefficient) does not depend on the specific measurement units used; for example, the correlation between height and weight will be identical regardless of whether inches and pounds, or centimeters and kilograms are used as measurement units. Proportional means linearly related; that is, the correlation is high if it can be "summarized" by a straight line (sloped upwards or downwards).

This line is called the regression line or least squares line, because it is determined such that the sum of the squared distances of all the data points from the line is the lowest possible. Note that the concept of squared distances will have important functional consequences on how the value of the correlation coefficient reacts to various specific arrangements of data (as we will later see).
How to Interpret the Values of Correlations. As mentioned before, the correlation coefficient (r) represents the linear relationship between two variables. If the correlation coefficient is squared, then the resulting value (r², the coefficient of determination) will represent the proportion of common variation in the two variables (i.e., the "strength" or "magnitude" of the relationship). In order to evaluate the correlation between variables, it is important to know this "magnitude" or "strength" as well as the significance of the correlation.
Significance of Correlations. The significance level calculated for each correlation is a primary source of information about the reliability of the correlation. As explained before (see Elementary Concepts), the significance of a correlation coefficient of a particular magnitude will change depending on the size of the sample from which it was computed. The test of significance is based on the assumption that the distribution of the residual values (i.e., the deviations from the regression line) for the dependent variable y follows the normal distribution, and that the variability of the residual values is the same for all values of the independent variable x. However, Monte Carlo studies suggest that meeting those assumptions closely is not absolutely crucial if your sample size is not very small and when the departure from normality is not very large. It is impossible to formulate precise recommendations based on those Monte- Carlo results, but many researchers follow a rule of thumb that if your sample size is 50 or more then serious biases are unlikely, and if your sample size is over 100 then you should not be concerned at all with the normality assumptions. There are, however, much more common and serious threats to the validity of information that a correlation coefficient can provide; they are briefly discussed in the following paragraphs.
Outliers. Outliers are atypical (by definition), infrequent observations. Because of the way in which the regression line is determined (especially the fact that it is based on minimizing not the sum of simple distances but the sum of squares of distances of data points from the line), outliers have a profound influence on the slope of the regression line and consequently on the value of the correlation coefficient. A single outlier is capable of considerably changing the slope of the regression line and, consequently, the value of the correlation, as demonstrated in the following example. Note, that as shown on that illustration, just one outlier can be entirely responsible for a high value of the correlation that otherwise (without the outlier) would be close to zero. Needless to say, one should never base important conclusions on the value of the correlation coefficient alone (i.e., examining the respective scatterplot is always recommended).

Note that if the sample size is relatively small, then including or excluding specific data points that are not as clearly "outliers" as the one shown in the previous example may have a profound influence on the regression line (and the correlation coefficient). This is illustrated in the following example where we call the points being excluded "outliers;" one may argue, however, that they are not outliers but rather extreme values.

Typically, we believe that outliers represent a random error that we would like to be able to control. Unfortunately, there is no widely accepted method to remove outliers automatically (however, see the next paragraph), thus what we are left with is to identify any outliers by examining a scatterplot of each important correlation. Needless to say, outliers may not only artificially increase the value of a correlation coefficient, but they can also decrease the value of a "legitimate" correlation.
See also Confidence Ellipse.
Quantitative Approach to Outliers. Some researchers use quantitative methods to exclude outliers. For example, they exclude observations that are outside the range of ±2 standard deviations (or even ±1.5 sd's) around the group or design cell mean. In some areas of research, such "cleaning" of the data is absolutely necessary. For example, in cognitive psychology research on reaction times, even if almost all scores in an experiment are in the range of 300-700 milliseconds, just a few "distracted reactions" of 10-15 seconds will completely change the overall picture. Unfortunately, defining an outlier is subjective (as it should be), and the decisions concerning how to identify them must be made on an individual basis (taking into account specific experimental paradigms and/or "accepted practice" and general research experience in the respective area). It should also be noted that in some rare cases, the relative frequency of outliers across a number of groups or cells of a design can be subjected to analysis and provide interpretable results. For example, outliers could be indicative of the occurrence of a phenomenon that is qualitatively different than the typical pattern observed or expected in the sample, thus the relative frequency of outliers could provide evidence of a relative frequency of departure from the process or phenomenon that is typical for the majority of cases in a group. See also Confidence Ellipse.
Correlations in Non-homogeneous Groups. A lack of homogeneity in the sample from which a correlation was calculated can be another factor that biases the value of the correlation. Imagine a case where a correlation coefficient is calculated from data points which came from two different experimental groups but this fact is ignored when the correlation is calculated. Let us assume that the experimental manipulation in one of the groups increased the values of both correlated variables and thus the data from each group form a distinctive "cloud" in the scatterplot (as shown in the graph below).

In such cases, a high correlation may result that is entirely due to the arrangement of the two groups, but which does not represent the "true" relation between the two variables, which may practically be equal to 0 (as could be seen if we looked at each group separately, see the following graph).

If you suspect the influence of such a phenomenon on your correlations and know how to identify such "subsets" of data, try to run the correlations separately in each subset of observations. If you do not know how to identify the hypothetical subsets, try to examine the data with some exploratory multivariate techniques (e.g., Cluster Analysis).
Nonlinear Relations between Variables. Another potential source of problems with the linear (Pearson r) correlation is the shape of the relation. As mentioned before, Pearson r measures a relation between two variables only to the extent to which it is linear; deviations from linearity will increase the total sum of squared distances from the regression line even if they represent a "true" and very close relationship between two variables. The possibility of such non-linear relationships is another reason why examining scatterplots is a necessary step in evaluating every correlation. For example, the following graph demonstrates an extremely strong correlation between the two variables which is not well described by the linear function.

Measuring Nonlinear Relations. What do you do if a correlation is strong but clearly nonlinear (as concluded from examining scatterplots)? Unfortunately, there is no simple answer to this question, because there is no easy-to-use equivalent of Pearson r that is capable of handling nonlinear relations. If the curve is monotonous (continuously decreasing or increasing) you could try to transform one or both of the variables to remove the curvilinearity and then recalculate the correlation. For example, a typical transformation used in such cases is the logarithmic function which will "squeeze" together the values at one end of the range. Another option available if the relation is monotonous is to try a nonparametric correlation (e.g., Spearman R, see Nonparametrics and Distribution Fitting) which is sensitive only to the ordinal arrangement of values, thus, by definition, it ignores monotonous curvilinearity. However, nonparametric correlations are generally less sensitive and sometimes this method will not produce any gains. Unfortunately, the two most precise methods are not easy to use and require a good deal of "experimentation" with the data. Therefore you could:

1. Try to identify the specific function that best describes the curve. After a function has been found, you can test its "goodness-of-fit" to your data.
2. Alternatively, you could experiment with dividing one of the variables into a number of segments (e.g., 4 or 5) of an equal width, treat this new variable as a grouping variable and run an analysis of variance on the data.

Exploratory Examination of Correlation Matrices. A common first step of many data analyses that involve more than a very few variables is to run a correlation matrix of all variables and then examine it for expected (and unexpected) significant relations. When this is done, you need to be aware of the general nature of statistical significance (see Elementary Concepts); specifically, if you run many tests (in this case, many correlations), then significant results will be found "surprisingly often" due to pure chance. For example, by definition, a coefficient significant at the .05 level will occur by chance once in every 20 coefficients. There is no "automatic" way to weed out the "true" correlations. Thus, you should treat all results that were not predicted or planned with particular caution and look for their consistency with other results; ultimately, though, the most conclusive (although costly) control for such a randomness factor is to replicate the study. This issue is general and it pertains to all analyses that involve "multiple comparisons and statistical significance." This problem is also briefly discussed in the context of post-hoc comparisons of means and the Breakdowns option.
Casewise vs. Pairwise Deletion of Missing Data. The default way of deleting missing data while calculating a correlation matrix is to exclude all cases that have missing data in at least one of the selected variables; that is, by casewise deletion of missing data. Only this way will you get a "true" correlation matrix, where all correlations are obtained from the same set of observations. However, if missing data are randomly distributed across cases, you could easily end up with no "valid" cases in the data set, because each of them will have at least one missing data in some variable. The most common solution used in such instances is to use so-called pairwise deletion of missing data in correlation matrices, where a correlation between each pair of variables is calculated from all cases that have valid data on those two variables. In many instances there is nothing wrong with that method, especially when the total percentage of missing data is low, say 10%, and they are relatively randomly distributed between cases and variables. However, it may sometimes lead to serious problems.
For example, a systematic bias may result from a "hidden" systematic distribution of missing data, causing different correlation coefficients in the same correlation matrix to be based on different subsets of subjects. In addition to the possibly biased conclusions that you could derive from such "pairwise calculated" correlation matrices, real problems may occur when you subject such matrices to another analysis (e.g., multiple regression, factor analysis, or cluster analysis) that expects a "true correlation matrix," with a certain level of consistency and "transitivity" between different coefficients. Thus, if you are using the pairwise method of deleting the missing data, be sure to examine the distribution of missing data across the cells of the matrix for possible systematic "patterns."
How to Identify Biases Caused by the Bias due to Pairwise Deletion of Missing Data. If the pairwise deletion of missing data does not introduce any systematic bias to the correlation matrix, then all those pairwise descriptive statistics for one variable should be very similar. However, if they differ, then there are good reasons to suspect a bias. For example, if the mean (or standard deviation) of the values of variable A that were taken into account in calculating its correlation with variable B is much lower than the mean (or standard deviation) of those values of variable A that were used in calculating its correlation with variable C, then we would have good reason to suspect that those two correlations (A-B and A-C) are based on different subsets of data, and thus, that there is a bias in the correlation matrix caused by a non-random distribution of missing data.
Pairwise Deletion of Missing Data vs. Mean Substitution. Another common method to avoid loosing data due to casewise deletion is the so-called mean substitution of missing data (replacing all missing data in a variable by the mean of that variable). Mean substitution offers some advantages and some disadvantages as compared to pairwise deletion. Its main advantage is that it produces "internally consistent" sets of results ("true" correlation matrices). The main disadvantages are:

1. Mean substitution artificially decreases the variation of scores, and this decrease in individual variables is proportional to the number of missing data (i.e., the more missing data, the more "perfectly average scores" will be artificially added to the data set).
2. Because it substitutes missing data with artificially created "average" data points, mean substitution may considerably change the values of correlations.

Spurious Correlations. Although you cannot prove causal relations based on correlation coefficients (see Elementary Concepts), you can still identify so-called spurious correlations; that is, correlations that are due mostly to the influences of "other" variables. For example, there is a correlation between the total amount of losses in a fire and the number of firemen that were putting out the fire; however, what this correlation does not indicate is that if you call fewer firemen then you would lower the losses. There is a third variable (the initial size of the fire) that influences both the amount of losses and the number of firemen. If you "control" for this variable (e.g., consider only fires of a fixed size), then the correlation will either disappear or perhaps even change its sign. The main problem with spurious correlations is that we typically do not know what the "hidden" agent is. However, in cases when we know where to look, we can use partial correlations that control for (partial out) the influence of specified variables.
Are correlation coefficients "additive?" No, they are not. For example, an average of correlation coefficients in a number of samples does not represent an "average correlation" in all those samples. Because the value of the correlation coefficient is not a linear function of the magnitude of the relation between the variables, correlation coefficients cannot simply be averaged. In cases when you need to average correlations, they first have to be converted into additive measures. For example, before averaging, you can square them to obtain coefficients of determination, which are additive (as explained before in this section), or convert them into so-called Fisher z values, which are also additive.
How to Determine Whether Two Correlation Coefficients are Significant. A test is available that will evaluate the significance of differences between two correlation coefficients in two samples. The outcome of this test depends not only on the size of the raw difference between the two coefficients but also on the size of the samples and on the size of the coefficients themselves. Consistent with the previously discussed principle, the larger the sample size, the smaller the effect that can be proven significant in that sample. In general, due to the fact that the reliability of the correlation coefficient increases with its absolute value, relatively small differences between large correlation coefficients can be significant. For example, a difference of .10 between two correlations may not be significant if the two coefficients are .15 and .25, although in the same sample, the same difference of .10 can be highly significant if the two coefficients are .80 and .90.

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