DES STAT-DEFINTION.pptx-discriptive statistics as part of economics

Statistics

1. DEFINTIONS Statistics has been defined differently by different statisticians from time to time. The reasons for a variety of definitions are two. In ancient times, statistics was confined only to the affairs of the state. But in modern times, the field of utility of statistics has widened considerably. Hence, a number of old definitions which were confined to a very narrow field of enquiry were replaced by new definitions which are much more comprehensive and exhaustive.

2. Contd … Statistics has been defined in two ways. Some statisticians have defined it as statistical data i.e.; numerical statement of facts, while others define it as statistical methods, i.e.; complete body of principles and techniques used in collecting and analyzing such data.

3. Some important definitions . Statistics as statistical data: Webster defines statistics as “classified facts representing the conditions of people in a State – especially those facts which can be stated in numbers or in any other tabular or classified arrangements.” This definition confines statistics only to the data pertaining to a State. Bowley defines statistics as “numerical statements of facts in any department of enquiry placed in relation to each other.”

4. Contd … An exhaustive definition is given by Prof. Horace Secrist , “By statistics, we mean 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 a systematic manner for a predetermined purpose and placed in relation to each other.”

5. Contd.. Statistics as Statistical Method: Bowley defines statistics in the following three ways: Statistics may be called the science of counting. Statistics may be rightly called the science of averages. Statistics is the science of the measurement of social organism.

6. Contd … But none of Bowley’s definition is adequate. Firstly, Statistics is not merely confined to the collection of data as other aspects like Presentation, analysis and interpretation are also covered by it. Secondly , averages are only a part of statistical tools used in the analysis of the data. Others being dispersion, skewness , correlation etc . Finally, his definition restricts the application of statistics to Sociology alone. But in modern days, statistics is used in almost all the fields.

7. Contd … According to Boddington , “Statistics is the science of estimates and probabilities.” This definition constitutes only a part of statistical methods. According to King , “Statistics is the method of judging collective, natural or social phenomenon from the results obtained from the analysis or enumeration or collection of estimates.” Lovitt defines statistics as the “Science which deals with the collection, classification and tabulation of numerical facts as the basis for explanation, description and comparison of phenomenon.”

8. Contd …. The best definition is given by Croxton and Cowden . According to them, “Statistics is defined as the science which deals with the collection, analysis and interpretation of numerical data.”

9. FUNCTIONS OF STATISTICS It presents the facts in a definite form : Statistics presents facts in a precise and definite from by expressing it in the numerical or quantitative from. For e.g., the statement ‘the number of students passed in statistics paper in NUALS in the year 2021-22 was higher than that in 2020-21 will not give a clear idea of the situation. However, the statement ‘the number of students who passed in statistics paper in NUALS in the year 2021-22 was 54 as compared to the year 2020-21 in which the number of students passed was 50 conveys a definite information.

10. Contd … It simplifies a mass of figures : Statistics helps in condensing mass of data into few significant figures. Hence, the statistical methods present meaningful overall information of the mass of data. It helps in formulating and testing of hypothesis : Statistical methods are extremely helpful in formulating and testing hypothesis to develop new theories. For e.g., whether students have benefited from extra coaching can be tested by appropriate statistical tools.

11. Contd … It helps in prediction : Statistical methods provide helpful means of forecasting future events. For e.g., a cement manufacturer can predict how much cement he should produce in 2022 based on the demand for it in the current year. It helps in formulation of suitable policies : Statistics provide the basic material for framing suitable policies for the Government and other agencies. For e.g., the data regarding population helps in determining the future needs such as food, clothing etc.

12. Contd … It facilitates comparison : Statistical methods provide comparison for same kind of figures. For e.g., if we know the average marks of students of 2 batches for a particular subject, we can compare the average marks and conclude students of which semester is better in that subject.  

13. LIMITATIONS Statistics and its techniques are widely used in every branch of knowledge. W.I. King rightly said: “Science of statistics is the most useful servant, but only of great value to those who understand its proper use. The scope of statistics is very wide and it has great utility; but these are restricted by its limitations. Following are the important limitations of statistics.

14. Contd … Statistics does not deal with individual items : statistics deals with groups or aggregates only and the study of an individual fact lies outside the scope of statistics. For example the mark secured by a student in legal history is 40 does not constitute a statistical statement, where as the average marks secured by students of 2012 batch in legal history is 55 constitute a statistical statement.

15. Contd … Statistics deals with quantitative data : Statistics does not study the data which cannot be measured in quantitative terms. For e.g., average height of students of a class, per capita income etc can be studied by the statistical methods. But qualitative aspects such as honesty beauty etc cannot be studied directly. According to Prof. Horace Secrist ,” Some phenomenon cannot be quantitatively measured; honesty, resourcefulness, integrity, goodwill, all important in industry as well as in life, is generally not susceptible to direct statistical measurement.” If we convert the qualitative data into quantitative data, comparison is possible

16. Contd …. Statistical laws are true only on average : statistical laws are not perfect as the laws of physics or astronomy. The reason is that “statistical laws are true only on average”. Statistics deals with such phenomenon which is affected by multiplicity of causes and it is not possible to study the effects of each of these factors separately as is done under experimental methods. It is due to this limitation in statistical methods, the conclusions arrived at are not perfectly accurate and consequently the same conclusions cannot be arrived at under similar conditions at all times. Statistics are the means and not a solution to a problem.

17. Contd.. Statistics does not reveal the entire story : since most of the problems are affected by such factors which are incapable of statistical analysis, it is not possible to examine a problem in all its manifestations only by a statistical approach. According the Marshall, “statistics are like straw, of which, I like every other economist have to make bricks”.

18. Contd … Statistics is liable to be misused: the most important limitation is that it must be used by experts. According to Bowley , “Statistics only furnishes a tool though imperfect, which is dangerous in the hands of those who do not know its use and deficiencies. W.I King states, “Statistics are like clay of which you can make a god or devil as you please”. He remarked “Science of Statistics is the useful servant, but only of great value to those who understand its proper use”

19. Contd … Statistics is a good tool to an expert . The greatest limitation of statistics is that it deals with figures which can be easily distorted, manipulated or moulded by politicians, corrupt, dishonest or unskilled workers for personal selfish motives. Statistics neither prove nor disprove anything. It is only a tool, if rightly used may prove quite useful but if misused by unskilled and dishonest statisticians might lead to very fallacious conclusions.