1Statistics: An IntroductionLIR 832Class #1J 8 2007January 8, 2007Topics of the Day•1Some really nice pictures (graphical display of1. Some really nice pictures (graphical display ofquantitative data and more)• 2. Why do we teach statistics other than to makeyour life miserable for a semester?• 3. What is in it for me as a future HR/LRpractitioner?• 4. Fundamental issues in statistics (what reallymatters)• 5. The structure of the course2The Use of Statistics:Classic Examples•Tufte:The Visual Display of Quantitative•Tufte: The Visual Display of Quantitative Information– “For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled” (Richard Feynman’s conclusion on the explosion of the spaceconclusion on the explosion of the space shuttle).The Use of Statistics:Classic Examples•Data map: John Snow (1854)–deaths from•Data map: John Snow (1854) –deaths from cholera in Central London:– Before knowledge of bacterial sources of illness (Holmes father in 1847; Louis Pasteur later on).– Deaths are dots; x’s are water pumps;– Deaths are clustered around the Broad St. Pump– Removal of handle ended an epidemic which killed more than 5003The Use of Statistics: Classic Examples•Data map: National cancer rates by countyata ap: Nat o a ca ce ates by cou ty– From darkest (in highest decile of cancer rates) to lightest (lower than US as a whole).– High death rates from cancer in the northeast part of the country and around the Great Lakes (High levels of air pollution and dense concentration of industry).– Low rates in an east-west band across the middle of the country.– Higher rates for men than for women in the south, particularly L i i ( lik l d b i l fLouisiana (cancers likely caused by occupational exposure from working with asbestos in shipyards).– Can you find the counties which are downwind from the Nevada test range?– Can you find the central locations for the chemical industry in the US?The Use of Statistics: Classic Examples•Data Map: Space and Time-Charles Minard•Data Map: Space and Time -Charles Minard (1861) - Napoleon’s March– Width of line varies continuously with size of the army.– The line establishes the longitude and latitude of the army.– The lines show the direction of movement of the army.– The location of the army with respect to certain dates is marked.– The temperature along the path of march is marked.4The Use of Statistics:Classic Examples•Computer Graphics: Space and Time•Computer Graphics: Space and Time– Concentration of Pollutants over L.A. July 22, 1979– Two dimensional surface: 6 south California counties– Nitrous oxides: power plants, refineries & vehicles• Refineries and Kaiser Steel produce post midnight peaks.• Traffic and power plants produce daytime peaks– Carbon monoxide:– Reactive hydrocarbons:The Use of Statistics:Classic Examples•Election Maps: Difficulty in Portraying•Election Maps: Difficulty in Portraying Information Accurately and making your point. (http://www-personal.umich.edu/~mejn/election/)5The Use of Statistics:Classic Examples•Tufte’s Principles of Graphic ExcellenceTufte s Principles of Graphic Excellence– “The efficient communication of complex quantitative ideas”– Show the data– Avoid distorting what the data have to say– Encourage the eye to compare different pieces of dataMake large data sets coherent–Make large data sets coherent– Induce the viewer to think about the substance rather than about methodology, graphic design, the technology of graphic production, or something elseThe Use of Statistics:Truck Driver Retention•Factors Affecting OvertheRoad Truck•Factors Affecting Over-the-Road Truck Driver Retention: A More Traditional Application of Statistics to a Complex Relationship6The Use of Statistics:Truck Driver Retention•Background:•Background:– Ongoing shortage of truck drivers makes trucking firms very concerned, at least rhetorically, about driver retention– Have excellent data on drivers from a survey of truck drivers, would like to sort out factors affecting driver tti fi li f th ftretention so firm policy can focus on those factors– Problem, retention is multi-causal, many factors are likely to affect the retention of truck drivers and we need an approach that allows for all of these affects.The Use of Statistics:Truck Driver Retention•It is always good to start an inquiry with a•It is always good to start an inquiry with a little theory. This sets a question or questions that we structure our inquiry around.• The following from Freeman and Medoff: Two Faces of Unionism…:7The Use of Statistics:Truck Driver Retention•Monopoly face: unions raise wages and improveMonopoly face: unions raise wages and improve benefits• Exit-voice face.– Typical means of employees registering dissatisfaction with a job is to quit and find a new job.– Unions provide employees with an alternative route: voice•Improve communications because employees are protected against•Improve communications because employees are protected against bad consequences of communicating their views to management• Allow employees a means to communicate and decide on issues among themselves rather than being mediated by management. Employees rather than management decide on hard issues such as the allocation of benefits• Solves public goods problem at workThe Use of Statistics:Truck Driver Retention•Lower quit rates and longer tenure are a potential•Lower quit rates and longer tenure are a potential source of advantage to organized firms as they:– Save hiring and training costs– Have greater depth of human capital– Research on quits and employee tenure shows a strong positive association between tenure (years of service with employer) and unionism and a strong negative association between unionism and quits.8The Use of Statistics: Truck Driver Retention•This might be explained by the union“voice”This might be explained by the union voice effect but it might also be an example of the monopoly face (syllogism):– Unions raise wages and increase benefits– All else constant, employees tend to stay with firms which provide better wages and benefits–To be better assured of union voice effects we need to–To be better assured of union voice effects we need to distinguish the monopoly face of unions on compensation from that of voice– Consistent with