Statistics Phase 2 : Types of Data used in Statistics
Now as we have obtained our data so the next step is to determine the type of data so that appropriate analysis can be performed based on the type of data
Data can be divided into 2 categories
Numerical Data is a type of data which is available to us in the form of numbers and is quantitative.It can further be divided into 2 categories
Discrete Data : It is a type of data which can only take a set of particular values. The set of values which the data can take are finite. For eg No. of claims arising in a given financial year. There is no restriction on the discrete data to take whole numbers it can have a set of values of negative integers and fractions
Continuous Data: it is a type of data in which the set of values which the data can take cannot be counted and it is infinite. Data can take any value within a given range. For eg exact weight of a person will lie in a range of (0kg,150kg) and exact age of a person will lie within (0yrs,130yrs) . Weight and age cannot take fixed particular values. Amounts of a claim are also continuous type data.
Categorical data is a type of data which is in the form of various categories or groups. It consists of qualitative data and is further divided into 3 categories
Attribute/Dichotomous Data : It is a type of data that have only 2 categories. For eg Yes/No, Claim/No claim. In statistics they are treated by converting them to indicator variables i.e a variable will take value 1 if yes and 0 if no.
Nominal Data : It is a type of data that have several unordered categories. For eg Type of Policy. You can’t order the categories in any way and they remain separate independent categories.
Ordinal Data : It is a type of data that have several ordered categories. For eg How was the movies – Very Good/Good/Average/Bad/Very Bad. The categories are always placed in a particular sequential order