Book Summary of Decisions by the Numbers by Dipak K. Gupta
Citation:
Decisions by the Numbers, Dipak K. Gupta, (Englewood Cliffs New Jersey: Prentice Hall, 1994), 525pp.
This Book Summary written by: Conflict Research Consortium Staff
Decisions by the Numbers is routinely required reading for economics
courses and recommended reading for environmental economics and philosophy
courses at CU Boulder. This work is divided into five distinct sections. The
first section will be useful to those who desire an understanding of the basic
elements of quantitative analysis. This section is devoted to
defining quantitative analysis as numbers derived from data and
understanding what those numbers mean. Gupta first examines methods of
descriptive statistics by focusing upon; measures of central tendency, measures of dispersion, and
skew ness and symmetry of
distribution. The author offers a brief introduction to probability theory
by discussing objective and subjective probability. The next undertaking is to
examine the source of the data used to derive the numbers. Gupta looks at:
where the numbers come from, what is being measured and the validity of the
measuring scales. The author examines in some depth the use of surveys
as the primary source of data with secondary sources being library searches.
Gupta concludes the first section by discussing the meaning of the numbers
derived from the data. Specifically, Gupta examines techniques of statistical assessment
and presentation of data as well as the use of graphical
methods of analysis. The author acknowledges the problem of interpretation
and intentional deception in the presentation of quantitative analysis.
The second section focuses, in some depth, upon projection techniques.
This section will be helpful to those who wish to understand the methods
employed by quantitative analysis to predict future trends based upon statistical analysis of present data. Gupta discusses the analysis of
historical data as a projection technique in which context methods of seasonal adjustment and
trend adjustment and Markov's chain
are examined. The author next examines the building of and the accuracy of
the method of least squares as a projection technique.
The problem of changes in trends, estimation of non-linear trends and the
difficulties associated with forecasting in general are given consideration.
Gupta devotes a lengthy chapter to multiple regression analysis.
The third section is devoted to efficient management through the use of quantitative
analysis. This section will be useful to those who need information on
planning a large data gathering project. Gupta examines the use of: a Gantt
chart, PERT and the Critical path method. This section
concludes with approaches to inventory and cash management.
The fourth section offers advice to those seeking assistance in choosing the
best alternative among multiple options presented to the public policy
decision-maker. The focus is upon benefit-cost analysis and the
steps necessary for conducting such an analysis. Gupta offers an examination of
linear programming as a tool for choosing the optimal mix of
alternatives.
The final section is helpful in understanding how decision-makers might deal
with uncertainty. Game theory is briefly discussed with more space being
devoted to queuing theory. Finally, Gupta discusses problems
with quantitative analysis and possible solutions.
A useful feature of Decisions by the Numbers are the appendices (six
in all). Contained in the appendices are: the z table, critical
values of the t distribution, the F statistic
at the 1% and 5% level of significance, chi-square distribution
and instruction manuals for a computer program (Mystat) which may be
used in conjunction with the text. Decisions by the Numbers is a primer
on quantitative analysis which offers the methods,
justifications, applications and difficulties with such analysis.
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