Here we saw What is Statistics? Definitions Meaning and Characteristics of the Statistics. The word “Statistics” is very popular and widely used now a days.
What is Statistics? Meaning
It has been derived from the Latin word “Status”, German word “Statistik” and the Italian word “Statista”, but all have the same meaning, that is political state.
In ancient period, “statistics” was used by the ruling head of states to collect the information, of the military strength, population, property and wealth of the country etc.
So, in those days “Statistics” was considered as the science of state craft. But at present, statistics is used by economists, managers, scientists researchers etc.
The word statistics can be used in both singular as well as plural sense. In singular sense, it means the methods and techniques used for the collection, presentation, analysis and interpretation of statistical data.
In plural sense, it means the numerical set of data or the quantitative information. These numerical figures may relate to imports, exports, incomes, populations, demand, supply etc.
Definition of Statistics
Different authors have defined the term ‘Statistics’ in different ways:
According to Prof. Horace Secrist: “Statistics is the aggregate of facts affected to a marked extent by multiplicity of causes, numerically expressed, enumerated or estimated according to reasonable standards of accuracy, collected in systematic manner for a per-determined purpose and placed in relation to each other.”
According to A.L. Bowley: “Statistics are numerical statement of facts in any department of inquiry placed in relation to each other.”
Of all the definitions, Prof. Horace Secrist’s definition seems to be the most comprehensive as it includes all the aspects of statistics.
Characteristics of Statistics
The following are the main characteristics of statistics:
1. Statistics are aggregate of facts
A single numerical figure is not statistics. For example, the height of a individual, the price of a certain commodity do not form statistics as are unrelated and incomparable.
But aggregate of the such figures figures of births, accidents suctions, imports, exports etc. constitute statistics as these figures can studied in relation to time, place and frequency of occurred.
2. Statistics must be numerically expressed
Qualitatively expressed statements such as “Nepal is a developing country“, “The cement production in Nepal is increasing”, “Nepal and China etc. do not constitute statistics.
But the quantitative statement In 1990, the production of wheat was 20 thousand metric tonnes compared to 15 thousand metric tonnes in 1985″ constitutes statistics
3. Statistics should be collected for a per-determined purpose
The objective or the purpose of the inquiry should be clearly stat ed before collecting the data.
The data collected without any per-determined purpose objective may not be useful for the inquiry.
So it is of at most important define in clear and concrete terms the objective or the purpose of the inquiry.
4. Statistics should be collected in a systematic manner
Suitable plan should be prepared for data collection and the work should be carried out in a systematic manner.
If the data are collected haphazardly, the conclusions may be wrong or miss leading.
5. Statistics should be capable of being placed in relation to each other
The numerical data should be comparable, as statistics are collected mostly for the purpose of comparisons. The numerical data collected constitutes statistics if they are comparable.
In order to make valid comparisons, the data should be homogeneous and uniform.
For example, the export figure commodity for different years constitute statistics as they are comparable. But the height of a student and his intelligence quotient (I.Q) do not constitute statistics as they are not comparable.
Thus, we conclude that “All statistics are numerical statements of facts but all numerical statements of facts are not statistics.”
6. Statistics are affected to a great extent by multiplicity of causes
Numerical figures should be affected by a large number of causes.
For example, statistics of the production of a crop is affected by various factors s as amount of rain fall, quality of seeds, amount of fertilizer used etc.
7. Statistics are enumerated or estimated according to reasonable standards of accuracy
Data may be collected either by actual counting and measurement or by estimation.
The figures obtained by counting and measurement will be exact and accurate but the figures estimated can not be as accurate as those obtained by and measurement.
The degree of accuracy of the estimated values largely depends on the nature and purpose of the inquiry.
For example, while measuring the height of the people, accuracy will be aimed in terms of fraction of an inch where as in measuring the distance between two cities it may be in terms of km.
8. Reasonable standard of accuracy should be maintained in collection of statistics:
Statistics deals with large number of data. Instead of counting each and every item, Statisticians take a sample and apply the result thus obtained from sample to the whole group.
The degree of accuracy of sample largely depends upon the nature and object of the enquiry. If reasonable standard of accuracy is not maintained, numbers may give misleading result.
Importance and Scope of Statistics:
The fact that in the modern world statistical methods are universally applicable. It is in itself enough to show how important the science of statistics is.
As a matter of fact there are millions of people all over the world who have not heard a word about statistics and yet who make a profuse use of statistical methods in their day- to-day decisions.
Statistical methods are common ways of thinking and hence are used by all types of persons.
Examples can be multiplied to show that human behavior and statistical methods have much in common. In fact statistical methods are so closely connected with human actions and behavior that practically all human activity can be explained by statistical methods. This shows how important and universal statistics is.
Let us now discuss briefly the importance of statistics in some different disciplines:
(i) Statistics in Planning:
Statistics is indispensable in planning—may it be in business, economics or government level. The modern age is termed as the ‘age of planning’ and almost all organizations in the government or business or management are resorting to planning for efficient working and for formulating policy decision.
To achieve this end, the statistical data relating to production, consumption, birth, death, investment, income are of paramount importance. Today efficient planning is a must for almost all countries, particularly the developing economies for their economic development.
(ii) Statistics in Mathematics:
Statistics is intimately related to and essentially dependent upon mathematics. The modern theory of Statistics has its foundations on the theory of probability which in turn is a particular branch of more advanced mathematical theory of Measures and Integration.
Ever increasing role of mathematics into statistics has led to the development of a new branch of statistics called Mathematical Statistics.
Thus Statistics may be considered to be an important member of the mathematics family. In the words of Connor, “Statistics is a branch of applied mathematics which specialises in data.”
(iii) Statistics in Economics:
Statistics and Economics are so intermixed with each other that it looks foolishness to separate them. Development of modern statistical methods has led to an extensive use of statistics in Economics.
All the important branches of Economics consumption, production, exchange, distribution, public finance use statistics for the purpose of comparison, presentation, interpretation, etc.
Problem of spending of income on and by different sections of the people, production of national wealth, adjustment of demand and supply, effect of economic policies on the economy etc. simply indicate the importance of statistics in the field of economics and in its different branches.
Statistics of Public Finance enables us to impose tax, to provide subsidy, to spend on various heads, amount of money to be borrowed or lent etc. So we cannot think of Statistics without Economics or Economics without Statistics.
(iv) Statistics in Social Sciences:
Every social phenomenon is affected to a marked extent by a multiplicity of factors which bring out the variation in observations from time to time, place to place and object to object.
Statistical tools of Regression and Correlation Analysis can be used to study and isolate the effect of each of these factors on the given observation.
Sampling Techniques and Estimation Theory are very powerful and indispensable tools for conducting any social survey, pertaining to any strata of society and then analyzing the results and drawing valid inferences.
The most important application of statistics in sociology is in the field of Demography for studying mortality (death rates), fertility (birth rates), marriages, population growth and so on.
In this context Croxton and Cowden have rightly remarked:
“Without an adequate understanding of the statistical methods, the investigators in the social sciences may be like the blind man groping in a dark room for a black cat that is not there. The methods of statistics are useful in an over-widening range of human activities in any field of thought in which numerical data may be had.”
(v) Statistics in Trade:
As already mentioned, statistics is a body of methods to make wise decisions in the face of uncertainties. Business is full of uncertainties and risks. We have to forecast at every step. Speculation is just gaining or losing by way of forecasting.
Can we forecast without taking into view the past? Perhaps, no. The future trend of the market can only be expected if we make use of statistics. Failure in anticipation will mean failure of business.
Changes in demand, supply, habits, fashion etc. can be anticipated with the help of statistics. Statistics is of utmost significance in determining prices of the various products, determining the phases of boom and depression etc.
Use of statistics helps in smooth running of the business, in reducing the uncertainties and thus contributes towards the success of business.
(vi) Statistics in Research Work:
The job of a research worker is to present the result of his research before the community. The effect of a variable on a particular problem, under differing conditions, can be known by the research worker only if he makes use of statistical methods.
Statistics are everywhere basic to research activities. To keep alive his research interests and research activities, the researcher is required to lean upon his knowledge and skills in statistical methods.
However, in order to draw valid conclusions, a certain standard of accuracy must be maintained. In this way we can learn about the What is Statistics? Definitions Meaning and Characteristics of Statistics.