MUMTAZ HUSSAIN MS 170200647

Difference between Descriptive statistics and inferential statistics

In Descriptive statistics we take samples to describe the population with the help of different
tables, graphs or mathematical solutions. Where as in inferential statistics we collect the data
from a group of people and guess or make a prediction about that group of people on the basis of
data provided by these groups by asking questions to them.

Choosing statistic type for data analysis

With reference to the data provided, sales tax gap is 67% of the total sales tax collection that is
1,715 billion and further more Pakistan has only 40,000 registered sale tax payers. The main
factors behind this low tax collection are discussed afterward on the basis of the provided data so
we will choose inferential statistics for this data analysis.

Why choosing inferential statistics

1) Inferential statistic is based on the evidences, reasoning and a prediction based on these
evidences. In the above data we are provided with the data of low tax rate in Pakistan.
Then the data emphasizes on the reasons behind these low tax ratios. So it has been
concluded clearly by the data that inferential statistic will be used here for this data
analysis.
2) Inferential statistic describes a relationship between cause and effect phenomenon. In this
case causes such as feeble institution, fake purchase invoice, ineffective accountability
process are itself independent variables but the low tax ratio is an independent variable
that is an effect of the above causes and completely depending on all independent
variables (causes). So inferential statistic is completely justified.

3) The 3rd logic is the description of data, in descriptive statistic data is collected in the form
of graphs tables and mathematical solutions. But in the above case we are dealing with the
evidences and reasons so inferential statistic is justified here too.