Meaning of statistics

Statistics in 2 senses
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Plural Sense Singular Sense

Statistical Data Statistical Methods

Statistical Data (Plural Sense)

In the plural sense, statistics refers to aggregates of facts, affected to a marked extent
by multiplicity of causes, numerically expressed, enumerated or estimated according to
reasonable standards of accuracy, collected in a systematic for predetermined purpose
and placed in relation to each other.
For example, data relating to aggregate percentage of 5 Toppers of XII class of a school.

Aggregate of facts: Statistics are not just single numbers, but a collection of data that
can be compared. A single age of 30 is not statistics, but a group's ages can be
considered statistics.

Affected by multiplicity of causes: Studying the impact of one factor on numerical

data, such as crop production, is difficult as it is influenced by various factors like
rainfall, fertilizers, seeds, and cultivation method.

Numerically expressed: To be considered statistics, information must be expressed

numerically. Qualitative characteristics like intelligence or beauty cannot be included
unless they are assigned a numerical score.

Reasonable standard of accuracy: Statistics require a reasonable level of accuracy when

collecting data, but it doesn't need to be as precise as in accounting or math due to the
large amount of data involved. Generalization can still be achieved with reasonable
accuracy.

Pre determined purpose: Collecting statistical data should have a purpose, without a
predetermined purpose is pointless. Data collected haphazardly and without awareness
of its purpose is useless and cannot lead to valid conclusions.

Systematic manner: To ensure data accuracy, statistics should be collected

systematically. Collecting data in a disorganized way will reduce its reliability.

Statistics should be placed in order: Statistics need to be comparable to have

significance. Data must be homogeneous for comparison. Comparing heterogeneous data,
like men's height and tree height, is meaningless and not statistical.
Statistical Method (Singular Sense)
Statistics in singular sense may be defined as the collection, presentation, analysis and
interpretation of numerical data.
Collection of data: The main and the first step for statistical study and it also depends
on the objective of study.
Organisation of data: Editing and classifying data to organise it in proper form.
Presentation of data: Presenting data in the form of text, table, diagram, graph etc.
Analysis of data: Mathematical techniques such as central tendency, dispersion,
correlation, and regression are used to analyze presentations in a simple way.
Interpretation of data: It involves statistical thinking, skill and experience, to derive
meaning from analysed data.

Functions of statistics

Simplify complex facts: Understanding large numerical data can be challenging for
individuals. Statistical methods simplify complex data with techniques such as mean,
median, correlation, and graphs.

Present facts in definite form: Quantitative facts are more trustworthy than abstract
or qualitative ones. Statistics condense information and present it definitively, like
stating an annual inflation rate instead of simply saying prices are increasing.

Make comparison of facts: Comparing data is a crucial role of statistics as raw numbers
can lack context. Statistical methods like averages, rates, percentages, and ratios help
make comparisons meaningful. For instance, per capita income in developing countries is
only useful when compared to developed countries.

Facilitate planning and policy formation: On the basis of numerical data and their
analysis, businessmen and administrators can plan future activities and shape their
policies.

Forecasting: Accurately predicting future outcomes in business is crucial to minimize

uncertainty. Statistical techniques such as time series analysis and interpolation aid in
forecasting.

Enhance knowledge: Statistics expand perspectives, enhance logical thinking, and aid in
developing fresh ideas and theories.

Importance of statistics
Importance to govt.
The government's responsibilities have expanded, and they now need more quantitative
data to achieve their welfare goals and effectively manage their administration.
 Statistical techniques like time-series analysis, demand analysis, forecasting, and index
numbers are widely used to create economic policies.
In India, even political parties that operate within a democratic system rely on
statistical analysis to understand their level of popularity among the general public.

Importance in economics
Formulation of economic laws: The Inductive method of generalization, which relies on
statistical principles, was used to develop the well-known 'Law of Demand' and the idea
of 'Elasticity of Demand.'
Economic problem: The use of statistical data and techniques is essential in
comprehending and addressing economic issues such as inequality in income wealth
distribution etc.
Study of market structures: To study competition types, comparing prices, costs, and
profits of individual firms through statistics is necessary.
Helps in establishing mathematical relation: Statistical techniques can determine the
mathematical relationship between economic variables, such as demand and price using
data analysis.
Behaviour of different economic concepts: Trend-series analysis examines patterns in
commodity prices, production, consumption, money circulation, bank deposits, and
clearings.
Price analysis: Price surveys aid in examining price theories, policies, trends, and their
association with inflation.

Importance in economy planning

In economic planning, statistics are necessary to evaluate resources and determine if the
desired growth rate is feasible using available data and statistical methods.
It's impossible to plan an economy without using statistical methods since analyzing
economic data with these techniques can reveal critical issues that need urgent
attention, such as rising inflation rates.

Importance in business
Establishing a Business Unit: To start a business, one must evaluate its feasibility by
considering location, output size, input availability, taxes, market share, turnover, etc.
Statistics offer guidance for making informed decisions.
Estimating the demand of product: To plan for the future of a business, it's important
to predict how much product people will want to buy. Statistics can be useful for
creating trend lines that allow for accurate forecasting.
Production Planning: To avoid losses due to under or over production, a businessman
must plan production carefully to meet product demand. Maintaining a balance
between demand and supply requires careful production planning.
Making Quality Control: Statistical techniques (like preparation of control charts) can
also be used to control the quality of the product manufactured by a firm.
Making Marketing Strategy: Market research teams use statistical methods, such as pilot
surveys, to analyze data on consumers, competitors, pricing, etc. before launching a
product to determine its potential success in the market.
 Accounts writing and auditing: Businesses maintain records of income and expenses. To
make decisions, they use statistics to summarize the data and calculate measures like
production per labor unit or return on investment. Statistical methods can also identify
relationships between variables.

Limitations of statistics

Ignore Qualitative phenomenon: Statistics can only be used to study problems that can
be expressed in numbers. Qualitative characteristics like beauty, honesty, and health
cannot be measured directly.

Does not deal with individuals: Statistics focuses on overall data trends and disregards
individual data points. For instance, the average marks of a class are statistically
significant, not just one student's marks.

Misused: Statistics can be misused by ignorant or wrongly motivated persons. Any person
can misuse statistics and draw any type of conclusion he likes.

True only on average: Statistics is not as precise as natural sciences because statistical
laws are not universally true. For instance, if a town has an average of 3 thefts per week,
it doesn't mean that there will be no more thefts if 3 occurred on the first day.

No exact laws: Statistical laws are based on probabilities and therefore their inferences
are only estimates, not precise like those based on mathematical or scientific laws.

Only Experts can make the Best Possible use of Statistics: Statistics techniques are
complex and require expertise to use, making them unsuitable for laypeople. Only experts
should employ these methods.

Important questions with answers

Question Define statistics in plural sense.

Answer Statistics in plural refers to multiple causes affecting numerical facts expressed
or estimated with reasonable accuracy. They are systematically collected and
placed in relation to each other for a predetermined purpose.

Question Why statistics is important for govt.?

Answer The government and political parties in India use statistical techniques like
time-series analysis, demand analysis, forecasting, and index numbers to create
economic policies and understand their popularity among the general public.
Question What is the difference between statistics as singular and plural
sense?
Answer Statistics in plural sense deals with numerical information, whereas in singular
sense, statistics is a body of various methods and tools and statistics in plural
sense is descriptive in nature, but in singular sense, it is basically a tool of
analysis.

Question Write stages of statistical study?

Answer 1. Collection of data
2. Organisation of data
3. Presentation of data
4. Analysis of data
5. Interpretation of data

Question How statistics can help in making marketing strategies?

Answer Before a product is launched, market research team makes use of various
statistical techniques (like pilot survey), to analyse data on population,
purchasing power, habits of the consumers, competitors, pricing, etc. Such studies
reveal the possible market potential for the product.

*NOTE : Worksheet (Important questions of all typology with

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