Statistics

What is Statistics?

Statistics is a collection of numerical figures

or data obtained from the field of human
activity such as statistics of population,
literacy rate, inflation rate,GDP growth
rate etc.Such statistics are quite commonly
found in newspaper,journals,report and
you can also hear them in radio or
television.
 For Example:-
Population of India, 1901-2001

Census Year Population (million)

1901 238.4
1911 252.1
1921 251.3
1931 279.0
1941 318.7
1951 361.1
1961 439.2
1971 548.1
1981 683.3
1991 843.4
2001 1027.0
Size and literacy rate of different states of India,2001

States Area in sq.km Literacy rate

(1) (2) (3)
Andhra Pradesh 2,75,045 60.5
Assam 78,438 63.3
Bihar 94,163 47
Gujarat 1,96,024 69.1
Haryana 44,212 67.9
Karnataka 1,91,791 66.6
Kerala 38,863 90.9(highest literacy rate)
Madhya Pradesh 3,08,245 (largest state of India) 63.7
Maharashtra 3,07,713 76.9
Orissa 1,55,707 63.1
Punjab 50,362 69.7
Rajasthan 3,42,239 60.4
Tamil Nadu 1,30,058 73.5
Uttar Pradesh 2,40,928 56.3
West Bengal 88,752 68.6
 Characteristics of Statistics:
1) In statistics all the available information are expressed
in quantitative term.

3) Statistics must be aggregate of facts:-

Statistics is no where concern with the individual

numerical figure, it only concern with the group of
related numerical figure .
• Single and isolated figures are not statistics for simple
reason that such figures are unrelated and can not be
compared and no meaningful inference can be drawn
out of it.
• Always keep in mind that statistics is not only group of
numerical figures but the group of related numerical
figures ,so that the comparability is possible and on the
basis of which a meaningful inference can be drawn.
 For example:
Consider the following informations :-
 The population of India in 2001 is 1027 million.
 Size of Madha Pradesh is 308245 sq.km.
 Literacy rate of Kerala is 90.9%.

Q) This is also a group of figures but will you consider this group of
numerical figures as statistics?

Ans) No ,since the figures provided above are totally unrelated to each
other, the first one refers to the population size of India, the second
one refers to the size of state M.P and the third one refers to the
literacy condition of state Kerala and no comparably is possible
among them. So this group of numerical figure would not be
considered as statistics.
But instead of providing the single information
about the population of India of 2001,if we provide
the series of population figure starting from
1901,i.e.given in table-1,then it will be considered as
statistics because all the figures stating from the 1901
to 2001 refers to the population size of India at
different time and hence they are related and by
comparing the population figure of successive years
we can now easily infer that the population of India
increases steadily over the years.
Census Year Population (million)
1901 238.4
1911 252.1
1921 251.3
1931 279.0
1941 318.7
1951 361.1
Table-1
1961 439.2
1971 548.1 The population
1981 683.3 of India increases
1991 843.4 steadily over the
2001 1027.0 years.
Similarly instead of providing the single information
about the size of state Madha Pradesh. if we also
provide the sizes of other states (in sq.km) of India as
given in Table-2, then it will be considered as statistics
because all the figures refer the sizes of different states
of India and hence they are related and by comparing
the states in respect of their size ,we can now easily
infer that Madhya Pradesh is the largest state of India
by comparing the size of different states.
 States Area in sq.km
(1) (2)
Andhra Pradesh 2,75,045
Assam 78,438
Bihar 94,163
Gujarat 1,96,024
Haryana 44,212
Karnataka 1,91,791
Kerala 38,863 Table-2
Madhya Pradesh 3,08,245 (largest state of India)
Maharashtra 3,07,713
Orissa 1,55,707
Madhya
Punjab 50,362 Pradesh is the
Rajasthan 3,42,239 largest state of
Tamil Nadu 1,30,058 India.
Uttar Pradesh 2,40,928
West Bengal 88,752
Similarly instead of providing the single information
about the the literacy rate of Kerala, if we also provide the
literacy rates of the other states of India, as given in table-
3, then it will be considered as statistics because all the
figures related to the literacy rates of the different states
and hence they are related and by comparing the states in
respect to their literacy rate we can easily infer that the
literacy rate is highest in Kerala, which may not be
possible to analyse only by observing the single figure
about the literacy rate of Kerala.
 States Literacy rate
(1) (3)
Andhra Pradesh 60.5
Assam 63.3
Bihar 47
Gujarat 69.1
Haryana 67.9 Table-3
Karnataka 66.6
Kerala 90.9(highest literacy rate)
Madhya Pradesh 63.7
literacy rate is
Maharashtra 76.9 highest in Kerala
Orissa 63.1
Punjab 69.7
Rajasthan 60.4
Tamil Nadu 73.5
Uttar Pradesh 56.3
West Bengal 68.6
1) The purpose of collecting statistical data should be well
defined and specific:-

For example- If the objective is to collect the data on

prices it would not serve the purpose, unless one specify
whether the price refers to the wholesale price or retail
price and what are the relevant commodity in that taken
into consideration.
4) Statistics are affected by multiplicity of causes:-

In all the field of enquiry, the observed data are the result of
the large number of factors, each of which contributes to the
final figure.

For example-
Statistics of production of Rice are affected by the rainfall,
quality of soil,fertilizer,method of cultivation etc.

Statistics of the sales volume of a particular product is also

affected by the price of its own product, price of competing
product, purchasing power of consumer, taste of consumer etc.

Statistics segregate the effect of various factors and study

them.
In the absence of the above characteristics numerical
data cannot be called statistical and hence
“all statistics are numerical statement of facts but all
numerical statements of facts are not statistics”
 Statistical Method

In addition to the meaning of numerical

data statistics also refers to a subject i.e. a
method dealing with numerical data known
as statistical method.
The statistical methods are used for
collection,organisation,presentation,
analysis and interpretation of numerical
data.
 1) Collection of data

Collection of data constitute the first step in

statistical investigation. The must be collected with
utmost care because they form the foundation of
statistical analysis. If the data are faulty, then the
whole analysis on the basis of this data will be
misleading and lead to a wrong conclusion. The
data may be available from the existing published
or unpublished sources or may be collected by the
investigator himself.
 2) Organisation of data

After the data have been collected the next

step is to organize and present the raw data
in some suitable form. The need for proper
presentation arises because the raw data
collected from the investigation are so
varied and numerous that no such
meaningful inference can be drawn out of
it.
 Types of organisation
Organisation involves three steps
b) Editing
c) Classification
d) Tabulation
 a) Editing of data

The collected data must be edited or scrutinised

very carefully so that the omission, inconsistencies,
irrelevant answer, and wrong computation in
returns from survey must be corrected. We should
always remember that if the data are faulty then
the whole analysis based on this information will
be misleading.
• Editing for completeness:-The editor should check that each
questionnaire is complete in all respect i.e. each and every question has
been answered. If some questions have not been answered, the
informants should be contacted again either personally or through
correspondence and required correction should be done.
• Editing for consistency:-The editor should check that answer to the
questions are not contradictory in nature. If such contradictory answers
are found then the informants should be contacted again either
personally or through correspondence and required correction should be
done.
For example:- if among others, two questions in the questionnaire are:-
d) Are you employed?
e) What is your monthly salary?
The reply to the former question is “no” and to the later is Rs.5000/- per
month then there is contradiction and it should be clarified.
3) Editing for accuracy:- The reliability of the whole
analysis depend basically on the correctness of the
information. If the information supplied is inaccurate then
the whole analysis will be misleading and lead to a wrong
conclusion. It is therefore necessary for the editor to check
that the information is accurate in all respect. However if
the inaccuracy is due to mathematical errors, it can be easily
detected and rectified. But if the cause of inaccuracy is
faulty information supplies by informants then it may be
difficult to rectify it, for example:- information relating
incemr,age,sales etc.
4) Editing for homogeneity:- The editor should check
the information supplied by various people is
homogeneous or uniform
For example:- In the answer of the question about the
income of a person, if some informants have given the
monthly income, some annual income and some daily or
weekly income, then no comparison can be made. So the
editor have to keep in mind the information supplied by
the informants should be homogeneous in nature i.e. all
the informants should provide their monthly income.
 b) Classification of Data

Classification is the process of arranging

the collected statistical information under
different classes according to some common
characteristics possessed by the individual
members.
 For example

During the population census conducted by the

Census of India apart from the number of
members in each family various other statistical
information on different characteristics e.g.
sex,age,geographical location etc. of all people in
the country are collected. The total population is
then classified according to these characteristics.
 For Example:- Classification on the basis of sex

Total Population in number

Population of
India in 2001

Persons 1,028,737,436

Males 532,223,090

Females 496,514,346
 c)Tabulation of data

Tabulation is the logical and systematic organization of

statistical data in rows and column, designed to

Simplify the presentation.

Tabulation enables the significance of data readily
understood, and leaves a lasting impression than textual
presentation.
Enable the reader to quickly locate the desired
information.
It facilitates quick comparison of statistical data shown
between rows and columns.
 3)Representation of Data

In order to make the data suitable for analysis

and interpretation, the after classification and
tabulation, the have to be presented properly by
using Charts and Diagrams, so that the salient
characteristics of the data which is crucial in
terms of decision making and adoption of new
policies, comes out.
 Advantages:-

Diagrams are appealing to the eyes as well as to intellect,

and are therefore helpful is assimilating the data readily
and quickly.
It helps to find out the relative position of different sub
divisions and can draw a meaningful inference on the
basis of this comparative analysis.
Moreover a chart or diagram can clarify a complex
problem and reveal facts, which are not apparent from the
tabular form.
It is sometimes necessary in finding the trend in the time
series.
 d) Analysis of data
After collection, organization and diagrammatic
presentation the next step is that of analyse the character
of the data and to identify the problem associated with it.
Statistical analysis is a method of abstracting significant
facts from the large mass of numerical data collected
during the enquiry.
Methods used in analysing the presentated data are
numerous ranging from simple observation of data to
complocated,sophisticated and highly mathemetical
techniques such as, average,
dispersion,cerrelation,regression,time-series analysis etc.
 e) Interpretation of data

The last step of statistical investigation is interpretation

i.e. drawing conclusions from the data colleted and
analysed and suggest suitable policies that need to be
adopted in future. The interpretation of data is a difficult
task and require a high degree of skill and experience. If
the data have been analysed are not properly interpreted,
the whole purpose of the investigation may defeated and
lead to a wrong conclusion.Crrect interpretation will lead
to a valid conclusion of the study and thus can aid in
decision-making.
Consider the following example:-

Suppose we have statistics of the annual

sales figure of a particular product say
plain potato chips for the last 20 years as
shown in the table.
Year Annual sales of chips
1988 235568
1989 235574
1990 235586
1991 235596
1992 235623
1993 235635
1994 235656
1995 235658
1996 235666
1997 235689
1998 235698
1999 235689
2000 235655
2001 235645
2002 235617
2003 235623
2004 235621
2005 235616
2006 235613
2007 235609
In this particular problem, by simply observing
the annual sales figure of potato chips it is tough
to comment anything or to identify the problem
underlying within it.
So all that we require is the proper presentation
of the data through diagram or charts.
Suppose in this case we present the facts by
using a Bar Diagram.
.
Annual sales figure of plain potato chips,
1988-2007

Now, it is quite apparent that up to year

1998 the sales of plain potato chips
increased but after 1998 the sales of the
product began to decrease and it is
decreasing steadily there after.
So by ordinary observation of the data in the
tabular form (Table -1),it is difficult to identify
that the sales of the product gradually decreases
in the last few years. But through the
diagrammatic presentation of the data i.e. the
bar diagram, we can easily identify this that
after certain years the sales of the product stated
to decrease (specially after 1998).
• After identification of the problem, in order to
identify the causes behind the down-fall in the
demand, we have to apply different Statistical
Technique such as correlation, regression, time –
series analysis etc.
•
The last step of statistical investigation is
interpretation i.e. drawing conclusions from the data
colleted and analysed and suggest suitable policies that
need to be adopted in future.
After analysing the data of annual sales figure of the
plain potato chips for the last 20 year, we may
conclude that the main reason of the down-fall of the
product in last 10 years, is the increase in the
competitiveness of the market. In the last 10 years
many other competing products (for example-
Lays,Kurkure etc.) launched in the market which are
supplying product at more cheaper price and offer
huge variation in its taste and this makes the
consumers to switch from this plain chips.
• The future policies needed to be undertaken in order
to survive in the competing market are,

 Improve the quality and introduce more variety in its

taste.
 Improve the packaging of the product.
 Adopt a proper advertising strategies in order to
increase the sales volume.
 Statistics in states
In order to analyse the performance of any event
Statistical data and statistical methods are applied.

 In order to know the educational quality the data on

literacy rate, number of schools, number of teacher
preschool, school enrollment rate are taken.
 In order to know the Health condition the birth rate ,
death rate, fertility rate, infant mortality rate, neonatal
mortality rate, no of health centres ,hospitals, Doctors are
taken.
 Statistics in Business
In order to know the performance of a existing product in
the market and what policies need to undertake in near
future in order to improve its performance most of the
firms are now interested to conduct market research of
their product.
Not only for the existing products but also before a new
product is launched, a market research should be
conducted in order to know the possible market potential
for the product.
 Steps of market survey

The Market Research need to conducted by maintain

the following steps
2) Set the objective of the survey.
3) Set the Sampling Frame.
4) Questionnaire Designing.
5) Field Survey.
6) Collection of data.
7) Editing and organization of the raw data so that a
meaningful inference can be drawn out of this.
7) After transformation of raw data to a database,
the researcher analyse the data on the population,
purchasing power, price of raw materials used, habits
of consumer, prices and behavior of the competing
product etc. by using different statistical technique
i.e. Time series, Index Number, Regression,
correlation analysis. .All these factors are statistically
taken into account before fixing the price of the new
commodity and so that it may find a suitable place in
the market.
Such studies help to reveal the possible market
potential for the new product which is helpful in
establishing sales territory, advertising strategies
to increase the sales volume etc.
 It also helps in find out the key reason behind
the downfall in demand of existing commodities
and suggest the changes or policies that need to
be undertaken in near future in order to the
improve the performance of a existing product in
the market