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**Statistics:**
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Decision theory

## Modern Statistics Edit

A remarkable amount of today's modern statistics comes from the original work of R.A. Fisher in the early 20th Century. Although there are a dizzying number of minor disciplines in the field, there are some basic, fundamental studies. The beginning student of statistics will be more interested in one topic or another depending on his or her outside interest. The following is a list of some of the primary branches of statistics.

### Probability and Mathematical Statistics Edit

Those of us who are purists and philosophers may be interested in the union between pure mathematics and the messy realities of the world. A rigorous study of probability—especially the probability distributions and the distribution of errors—can provide an understanding of where all these statistical procedures and equations come from. Although this sort of rigor is likely to get in the way of a psychologist (for example) learning and using statistics effectively, it is important if one wants to do serious (ie. graduate-level) work in the field.

That being said, there is good reason for all students to have a fundamental understanding of where all these "statistical techniques and equations" are coming from! We're always more adept at using a tool if we can understand *why* we're using that tool. The challenge is getting these important ideas to the non-mathematician without the student's eyes glazing over. I can take this argument a step further to claim that a vast number of students will never actually use a t-test—he or she will never plug those numbers into a calculator and churn through some esoteric equations—but by having a fundamental understanding of such a test, he or she will be able to understand (and question) the results of someone else's findings.

### Design of Experiments Edit

One of the most neglected aspects of statistics—and maybe the single greatest reason that Statisticians drink—is Experimental Design. So often a scientist will bring the results of an important experiment to a statistician and ask for help analyzing results only to find that a flaw in the experimental design rendered the results useless. So often we statisticians have researchers come to us hoping that we will somehow magically "rescue" their experiments.

A friend provided me with a classic example of this. In his psychology class he was required to conduct an experiment and summarize its results. He decided to study whether music had an impact on problem solving. He had a large number of subjects (myself included) solve a puzzle first in silence, then while listening to classical music and finally listening to rock and roll, and finally in silence. He measured how long it would take to complete each of the tasks and then summarized the results.

What my friend failed to consider was that the results were highly impacted by a *learning effect* he hadn't considered. The first puzzle always took longer because the subjects were first learning how to work the puzzle. By the third try (when subjected to rock and roll) the subjects were much more adept at solving the puzzle, thus the results of the experiment would seem to suggest that people were much better at solving problems while listening to rock and roll!

The simple act of randomizing the order of the tests would have isolated the "learning effect" and in fact, a well-designed experiment would have allowed him to measure both the effects of each type of music *and* the effect of learning. Instead, his results were meaningless. A careful experimental design can help preserve the results of an experiment, and in fact some designs can save huge amounts of time and money, maximize the results of an experiment, and sometimes yield additional information the researcher had never even considered!

### Sampling Edit

Similar to the Design of Experiments, the study of sampling allows us to find a most effective statistical design that will optimize the amount of information we can collect while minimizing the level of effort. Sampling is very different from experimental design however. In a laboratory we can design an experiment and control it from start to finish. But often we want to study something outside of the laboratory, over which we have much less control.

If we wanted to measure the population of some harmful beetle and its effect on trees, we would be forced to travel into some forest land and make observations, for example: measuring the population of the beetles in different locations, noting which trees they were infesting, measuring the health and size of these trees, etc.

Sampling design gets involved in questions like "How many measurements do I have to take?" or "How do I select the locations from which I take my measurements?" Without planning for these issues, researchers might spend a lot of time and money only to discover that they really have to sample ten times as many points to get meaningful results or that some of their sample points were in some landscape (like a marsh) where the beetles thrived more or the trees grew better.

### Modern Regression Edit

Regression models relate variables to each other in a linear fashion. For example, if you recorded the heights and weights of several people and plotted them against each other, you would find that as height increases, weight tends to increase too. You would probably also see that a straight line through the data is about as good a way of approximating the relationship as you will be able to find, though there will be some variability about the line. Such linear models are possibly the most important tool available to statisticians. They have a long history and many of the more detailed theoretical aspects were discovered in the 1970s. The usual method for fitting such models is by "least squares" estimation, though other methods are available and are often more appropriate, especially when the data are not normally distributed.

What happens, though, if the relationship is not a straight line? How can a curve be fit to the data? There are many answers to this question. One simple solution is to fit a quadratic relationship, but in practice such a curve is often not flexible enough. Also, what if you have many variables and relationships between them are dissimilar and complicated?

Modern regression methods aim at addressing these problems. Methods such as generalized additive models, projection pursuit regression, neural networks and boosting allow for very general relationships between explanatory variables and response variables, and modern computing power makes these methods a practical option for many applications

### Classification Edit

Some things are different from others. How? That is, how are objects classified into their respective groups. Consider a bank that is hoping to lend money to customers. Some customers who borrow money will be unable or unwilling to pay it back, though most will pay it back as regular repayments. How is the bank to classify customers into these two groups when deciding which ones to lend money to?

The answer to this question no doubt is influenced by many things, including a customer's income, credit history, assets, already existing debt, age and profession. There may be other influential, measurable characteristics that can be used to predict what kind of customer a particular individual is. How should the bank decide which characteristics are important, and how should it combine this information into a rule that tells it whether or not to lend the money?

This is an example of a classification problem, and statistical classification is a large field containing methods such as linear discriminant analysis, classification trees, neural networks and other methods.

### Time Series Edit

Many types of research look at data that are gathered over time, where an observation taken today may have some correlation with the observation taken tomorrow. Two prominent examples of this are the fields of finance (the stock market) and atmospheric science.

We've all seen those line graphs of stock prices as they meander up and down over time. Investors are interested in predicting which stocks are likely to keep climbing (ie. when to buy) and when a stock in their portfolio is falling. It is easy to be mislead by a sudden jolt of good news or a simple "market correction" into inferring—incorrectly—that one or the other is taking place!

In meteorology scientists are concerned with the venerable science of predicting the weather. Whether trying to predict if tomorrow will be sunny or determining whether we are experiencing true climate changes (ie. global warming) it is important to analyze weather data over time.

### Survival Analysis Edit

Suppose that a pharmaceutical company is studying a new drug which it is hoped will cause people to live longer (either by curing them of cancer, reducing their blood pressure or cholesterol and thereby their risk of heart disease, or by some other mechanism). The company will recruit patients into a clinical trial, give some patients drug and other placebo, and follow them until they have amassed enough data to answer the question of whether, and by how long, the new drug extends life expectancy.

Such data present problems for analysis. Some patients will have died earlier than others, and often some patients will not have died before the clinical trial completes. Clearly, patients who live longer contribute informative data about the ability (or not) of the drug to extend life expectancy. So how should such data by analysed?

Survival analysis provides answers to this question and gives statisticians the tools necessary to make full use of the available data to correctly interpret the treatment effect.

### Categorical Analysis Edit

In laboratories we can measure the weight of fruit that a plant bears, or the temperature of a chemical reaction. These data points are easily measured with a yardstick or a thermometer, but what about the color of a person's eyes or her attitudes regarding the taste of broccoli? Psychologists can't measure someone's anger with a measuring stick, but they can ask their patients if they feel "very angry" or "a little angry" or "indifferent". Entirely different methodologies must be used in statistical analysis from these sorts of experiments. Categorical Analysis is used in a myriad of places, from political polls to analysis of census data to genetics and medicine.

### Clinical Trials Edit

In the United States, the FDA requires that pharmaceutical companies undergo **excruciatingly** rigorous procedures called Clinical Trials and statistical analyses to assure public safety before allowing the sale of use of new drugs. In fact, the pharmaceutical industry employs more statisticians than any other business!