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Chapter - 1 Statistics

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28 views15 pages

Chapter - 1 Statistics

Uploaded by

kuma780vikash
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter -: 1 [Meaning, scope and importance of

statistics ]
Topic to be cover
• Meaning of statistics
• Sense of statistics
• Function of Statistics
• Importance of economics
• Limitation of economics
Meaning of statistics
 Statistics, the science of collecting, analyzing, presenting, and interpreting data.

 Statistics is concerned with scientific methods for collecting,


organising, summarising, presenting and analysing data as well
as deriving valid conclusions and making reasonable decisions
on the basis of this analysis. Statistics is concerned with the
systematic collection of numerical data and its interpretation.
The word ‘ statistic’ is used to refer to ▪ Numerical facts, such
as the number of people living in particular area. ▪ The study of
ways of collecting, analysing and interpreting the facts .
Sense of economics

Singular sense It deals with the


collection of data, their classification,
analysis and interpretations of statistical
data. Therefore, it is described as a branch
of science which deals with classification,
Plural senseIn the plural sense, it refers to the numerical
facts and figures systematically collected for some special
purpose.
Singular Sense:
In a singular sense, it means the science of counting or science of average.
This definition has the following features:
1.Collection of data:
Most of the statistical analysis is performed on the basis of collected data. The
methods of data collection like primary and secondary, census and sampling,
etc. are related to data collection.
2.Organization of data:
After collecting data, a systematic arrangement is essential. They are
organized and presented in the table on the basis of rows and columns. This
process is known as a presentation of data.
3.Analysis of data:
The organized data presented need to be analyzed. There are various tools of
analysis in statistics like average, co-relation, regression, dispersion, etc.
4.Interpretation of data:
After analysis, results are interpreted and conclusions are drawn. IT is the last
and most essential part of the work. If findings are interpreted wrongly, the
wrong conclusion is obtained.
Plural Sense:
In the plural sense, it refers to the numerical facts and figures systematically
collected for some special purpose. This definition has the following features:
1.Statistics are aggregate of facts:
In statistics, the single numerical figure has no meaning. It is not statistics. The
numerical figures of production, income, price of commodities, students of the
class, etc. are statistics.
2.The values of statistics are numerically expressed:
The values of statistics are countable as well as numerically expressed. For
example, the numbers of students at Siddhartha College in grade 11 are 400. Among
them 264 are female and 136 are male, which constitute statistics.
3.Statistics are collected in a systematic manner:
Firstly, we have to think about the field of study. Then, data should be collected by
applying suitable methods and work should be carried out in a systematic manner.
Otherwise, interpretation and conclusion may be wrong or misleading.
4.Statistics are collected for a pre-determined purpose:
We must have a well-defined purpose, specific aims, and objectives before we
collect data. Suppose, if we want to compare the performance of students in grade
XI in Siddhartha College in one subject or more, we must specify the subject and
the year, for which comparison is carried out.
5.Statistics makes easy to comparison:
The collected numerical data constitute statistics if they are comparable. To make a
valid comparison, the data should be homogeneous. For example, the passed
number of students of Siddhartha College and other College constitute statistics,
as they are comparable. But the weight of the students and their intelligence do not
constitute statistics as they are not comparable.
Functions of statistics

1. To Present Facts in Definite


Form:
We can represent the things in their true form with the help of figures.
Without a statistical study, our ideas would be vague and indefinite.
The facts are to be given in a definite form. If the results are given in
numbers, then they are more convincing than if the results are
expressed on the basis of quality.

Example
The statements like, there is lot of unemployment in India or
population is increasing at a faster rate are not in the definite form.
The statements should be in definite form like the population in 2004
would be 15% more as compared to 1990.
2. Precision to the Facts:
 The statistics are presented in a definite form so
they also help in condensing the data into important
figures. So statistical methods present meaningful
information. In other words statistics helps in
simplifying complex data to simple-to make them
understandable.
 The data may be presented in the form of a graph,
diagram or through an average, or coefficients etc.
For example, we cannot know the price position
from individual prices of all good, but we can know
it, if we get the index of general level of prices.
3. Comparisons:
 Aftersimplifying the data, it can be correlated as
well as compared. The relationship between the
two groups is best represented by certain
mathematical quantities like average or
coefficients etc. Comparison is one of the main
functions of statistics as the absolute figures
convey a very less meaning.
4.Formulation and Testing of
Hypothesis:
 These statistical methods help us in
formulating and testing the hypothesis or a
new theory. With the help of statistical
techniques, we can know the effect of imposing
tax on the exports of tea on the consumption of
tea in other countries. The other example could
be to study whether credit squeeze is effective
in checking inflation or not.
5. Forecasting:
 Statistics can also predicts the future course of
action of the phenomena. We can make future
policies on the basis of estimates made with the
help of Statistics. We can predict the demand for
goods in 2005 if we know the population in 2004 on
the basis of growth rate of population in past.
Similarly a businessman can exploit the market
situation in a successful manner if he knows about
the trends in the market. The statistics help in
shaping future policies.
6. To Measure Uncertainty:
 Future is uncertain, but statistics help the various
authorities in all the phenomenon of the world to
make correct estimation by taking and analyzing
the various data of the part. So the uncertainty
could be decreased. As we have to make a forecast
we have also to create trend behaviors of the past,
for which we use techniques like regression,
interpolation and time series analysis.
Limitation of Statistics
1. Ignores the Qualitative Aspect: Statistics does not
consider aspects that can not be expressed in quantitative terms. One has to
convert the qualitative aspects like kindness, honesty, care, health, intelligence,
etc., into quantitative terms to study.
2. Does not Deal with Individual Terms: As the
definition of statistics suggests, it only deals with the aggregate of facts and does
not consider individual items. For example, it does not consider the marks of
one student but will consider the marks of a class.
3. Requires only Uniform and Homogeneous
Data: An economist can not perform a statistical study if the data gathered is
not homogeneous.
4. Can Be Misused: If the methods of statistics are not used by an
expert, trained, specialized, and unbiased person, there are huge chances of
misuse and inaccurate results. A biased individual can transform the data
according to their needs and purpose
5. Results are True only on Average: In statistics, a
result is true only on average. It means that if we say that the average mark of a

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