The heart of statistics is inferential statistics. Descriptive statistics are typically straightforward and easy to interpret. Unlike descriptive statistics, inferential statistics are often complex and may have several different interpretations.

The goal of inferential statistics is to discover some property or general pattern about a large group by studying a smaller group of people in the hopes that the results will generalize to the larger group. For example, we may ask residents of New York City their opinion about their mayor. We would probably poll a few thousand individuals in New York City in an attempt to find out how the city as a whole views their mayor. The following section examines how this is done.

Basic Inferential Statistics: Theory and Application

A population is the entire group of people you would like to know something about. In our previous example of New York City, the population is all of the people living in New York City. It should not include people from England, visitors in New York, or even people who know a lot about New York City.

A sample is a subset of the population. Just like you may sample different types of ice cream at the grocery store, a sample of a population should be just a smaller version of the population.

It is extremely important to understand how the sample being studied was drawn from the population. The sample should be as representative of the population as possible. There are several valid ways of creating a sample from a population, but inferential statistics works best when the sample is drawn at random from the population. Given a large enough sample, drawing at random ensures a fair and representative sample of a population.

Comparing two or more groups

Much of statistics, especially in medicine and psychology, is used to compare two or more groups and attempts to figure out if the two groups are different from one another.

Example: Drug X

Let us say that a drug company has developed a pill, which they think increases the recovery time from the common cold. How would they actually find out if the pill works or not? What they might do is get two groups of people from the same population (say, people from a small town in Indiana who had just caught a cold) and administer the pill to one group, and give the other group a placebo. They could then measure how many days each group took to recover (typically, one would calculate the mean of each group). Let's say that the mean recovery time for the group with the new drug was 5.4 days, and the mean recovery time for the group with the placebo was 5.8 days.

The question becomes, is this difference due to random chance, or does taking the pill actually help you recover from the cold faster? The means of the two groups alone does not help us determine the answer to this question. We need additional information.

Sample Size

If our example study only consisted of two people (one from the drug group and one from the placebo group) there would be so few participants that we would not have much confidence that there is a difference between the two groups. That is to say, there is a high probability that chance explains our results (any number of explanations might account for this, for example, one person might be younger, and thus have a better immune system). However, if our sample consisted of 1,000 people in each group, then the results become much more robust (while it might be easy to say that one person is younger than another, it is hard to say that 1,000 random people are younger than another 1,000 random people). If the sample is drawn at random from the population, then these 'random' variations in participants should be approximately equal in the two groups, given that the two groups are large. This is why inferential statistics works best when there are lots of people involved.

Variability

Even if we have a large enough sample size, we still need more information to reach a conclusion. What we need is some measure of variability. We know that the typical person takes about 5-6 days to recover from a cold, but does everyone recover around 5-6 days, or do some people recover in 1 day, and others recover in 10 days? Understanding the spread of the data will tell us how effective the pill is. If everyone in the placebo group takes exactly 5.8 days to recover, then it is clear that the pill has a positive effect, but if people have a wide variability in their length of recovery (and they probably do) then the picture becomes a little fuzzy. Only when the mean, sample size, and variability have been calculated can a proper conclusion be made. In our case, if the sample size is large, and the variability is small, then we would receive a small p-value (probability-value). Small p-values are good, and this term is prominent enough to warrant further discussion.

P-values

In classic inferential statistics, we make two hypotheses before we start our study, the null hypothesis, and the alternative hypothesis.

Null Hypothesis: States that the two groups we are studying are the same.

Alternative Hypothesis: States that the two groups we are studying are different.

The goal in classic inferential statistics is to prove the null hypothesis wrong. The logic says that if the two groups aren't the same, then they must be different. A low p-value indicates a low probability that the null hypothesis is correct (thus, providing evidence for the alternative hypothesis).

Remember: It's good to have low p-values.