UNIT 1
Statistics is a branch of mathematics that deals with collecting, organizing, and analyzing
numerical data to solve real-world problems. It is widely regarded as a distinct scientific
discipline due to its vast applications across various fields.
It can be defined as a part of applied mathematics that is concerned with the collection,
classification, interpretation, analysis of the numerical and categorical data and facts, and
drawing conclusions, so as to present the same in a systematic manner.
It involves a wide variety of methods which facilitate data analysis, for decision making
purposes.
It can be used to answer questions such as:
● What kind of data is to be collected?
● How much data is to be collected?
● How to organize and summarize data?
● How to analyze data and draw inferences from it?
● How do we assess the strength of conclusions and evaluate their uncertainty?
Definition of Statistics:
According to Merriam-Webster: Statistics is the science of collecting, analyzing,
interpreting, and presenting masses of numerical data.
According to Oxford English Dictionary: Statistics is a branch of mathematics dealing with
the collection, analysis, interpretation, presentation, and organization of data.
In the words of Croxton &Cowden, “Statistics may be defined as the collection,
presentation, analysis and interpretation of numerical data”.
Horace Secrist has given an exhaustive definition of the term statistics in the plural sense.
According to him: “By statistics we mean aggregates of facts affected to a marked extent by
a 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”.
Statistics Terminologies
Some of the most common terms you might come across in statistics are:
● Population: It is actually a collection of a set of individual objects or events
whose properties are to be analyzed.
● Sample: It is the subset of a population.
● Variable: It is a characteristic that can have different values.
● Parameter: It is numerical characteristic of population.
Statistics Examples:
Some real-life examples of statistics that you might have seen:
Example 1: In a class of 45 students, we calculate their mean marks to evaluate
performance of that class.
Example 2: Before elections, you might have seen exit polls. Exit polls are opinion of
population sample, that are used to predict election results.
Characteristics of Statistics
Statistics is characterized by:
1. Aggregate of Facts: Single and non-connected facts or figures are not statistics,
rather when the facts are aggregates, they are said to be statistics, as they can be
compared
2. Affected to a substantial extent by a variety of reasons: This means that statistics
are influenced to a substantial extent by a number of factors that operate together. For
example, The statistics of rice production is based on various factors like a method of
cultivation, climatic conditions, seeds, fertilizers and manures, etc.
3. Numerical expression: Statistics are expressed in terms of numbers. Therefore,
qualitative expressions such as happy, sad, right, wrong, good, or bad do not amount
to statistics. For example: ‘Production of ABC ltd. has risen’ is not statistics, but
‘Production of ABC ltd. has risen from 92000 units in 2020 to 110000 units in 2021’
is statistics.
4. Enumerated and Estimated as per reasonable standard of accuracy: Reasonable
accuracy needs to be there in the statistical data, as it acts as a basis for the field of
statistical enquiry. This is because, if the scope of the inquiry is narrow, then by using
the method of actual counting, the data can be collected, whereas if the scope of
inquiry is wide then the data collection will be based on estimate and estimates can be
inaccurate.
5. Data collection is carried out in a systematic manner: The collection of statistics
should be performed in a systematic as well as planned manner, because in the
absence of any system, the data collected can be unreliable and inaccurate, which may
also lead to misleading conclusions. Further, the purpose for its collection needs to be
stated beforehand to keep its usefulness intact.
6. Data must be placed in relation to one another: Data collection is performed for
the purpose of comparison and so the basis must be homogeneous. Because when the
basis of two units is heterogeneous, the comparison is not possible.
Scope of Statistics
The following are the main scope of statistics:
1. Presents facts in numerical figures: The first function of statistics is to present a given
problem in terms of numerical figures. We know that the numerical presentation helps in
having a better understanding of nature an of problem.
2. Presents complex facts in a simplified form: Generally, a problem to be investigated is
represented by a large mass of numerical figures which are very difficult to understand and
remember. Using various statistical methods, this large mass of data can be presented in a
simplified form.
3. Studies relationship between two or more phenomena: Statistics can be used to
investigate whether two or more phenomena are related. For example, the relationship
between income and consumption, demand and supply, etc.
4. Helps in the formulation of policies: Statistical analysis of data is the starting point in the
formulation of policies in various economic, business and government activities.
For example, using statistical techniques a firm can know the tastes and preferences of the
consumers and decide to make its product accordingly.
5. Helps in forecasting: The success of planning by the Government or of a business
depends to a large extent upon the accuracy of their forecasts. Statistics provides a scientific
basis for making such forecasts.
6. Provides techniques for testing of hypothesis: A hypothesis is a statement about some
characteristics of a population (or universe).
7. Provides techniques for making decisions under uncertainty: Many times we face an
uncertain situation where any one of the many alternatives may be adopted. A businessman
might face a situation of uncertain investment opportunities in which he can lose or gain.
He may be interested in knowing whether to undertake a particular investment or not. The
answer to such problems are provided by the statistical techniques of decision-making under
uncertainty.
Nature of Statistics
Statistical methods are inductive in nature, because generalizations result from individual
observation. Generalizations made after a statistical investigation show that they are true on
the average. They do not describe the behavior of individuals but show typical behavior of all
the items. There is greater stability in masses than individual items. The statistical
generalizations provide estimates of the characteristic behavior of populations but not of
individual persons.
Purpose: The real purpose of statistical methods is to make sense out of facts and figures, to
prove the unknown, and to cast light upon the situation. The ultimate end of statistical
research is to enable comparison to be made between past and present results with a view to
ascertaining the reasons for changes which have taken place and the effects of such changes
on the future. The statistical methods are employed as a tool for comparison between past and
present events to throw light on the reasons for changes, effects of changes and plans for
future. That is, statistics is viewed not only as a mere device for collecting numerical data but
as a means of sound techniques for their handling, analyzing and drawing valid inferences on
them. This is so because statistics helps in drawing conclusions from facts affected by a
multiplicity of causes in any .department of enquiry.
Statistics as Science: Before analyzing this It is very important to understand what is a
science.
Science is basically "accumulated and accepted knowledge that has been systematized and
formulated with reference to the discovery of general truth or operation of general law”. In
other words, science is a body of systematized knowledge. Any branch of knowledge can be
called a science if it possesses the following characteristics:
● Laws of science should be based on cause and effect relationships.
● Its knowledge should be systematic and its methods should be logical.
● Being a systematized body of knowledge based on certain principles, science is
capable of general application.
● Its laws should be capable of forecasting the future of action of a phenomenon.
Its principles and laws have a high degree of precision.
Characteristics of a science are the observation of certain facts, the selection and
classification of relevant material, and the using of these as a basis for generalization. Then it
becomes possible to formulate laws which are universally true under specified conditions and
which can be applied to the analysis of new situations. Science is an organized theoretical
knowledge, empirically derived, critically tested and generalized into laws, principles and
theories. Keeping in view the above characteristics, we find that all of them are present in
statistics.
It is said that "Science without statistics bears no fruit; statistics without science has no root".
All the concepts of science are formulated, tested or modified with the help of statistics. It
explains the facts. As a science, the statistical method is a part of the general scientific
method and is based on the same fundamental ideas and processes.
Statistics as Art: Art is defined as ''skill, dexterity, or the power of performing certain
actions, acquired by experience, study or observation”. Art has following characteristics:
● Art does not describe facts, but examines merits and demerits and tells the way to
achieve the desired result.
● Art is a system or rules for the attainment of a given end.
● Art teaches us how to do things.
● Art is a practical application of a set of rules or principles to practice.
● As other social sciences, it deals with human beings. The behavior of human beings
cannot be measured accurately as those of science.
Statistics possesses all these important characteristics and so it may be concluded that it is an
art. By science we can know a thing; by art we can do that thing. Statistics is regarded as an
art of applying the science of scientific method. Statistics as an art, gives us solutions of
various problems with the help of index numbers, central tendencies etc. Art helps us with
ways and means of handling data to draw proper conclusions. On these bases, statistics can
be regarded as an art. Thus, statistics is both science and art.
Functions of Statistics
Statistics performs the following functions:
● Reduces complexities: Using statistical methods, voluminous data can be presented
in a way that it can be easily understood. Hence, it reduces the complexity to
understand a vast amount of data, to simplify its meaning.
● Expresses facts in numbers: An important function of statistics is that it can
transform facts into numbers, which is easy to understand by anyone.
● Presentation of data in condensed form: Data collected is usually in raw form,
which is complex and unorganized. Hence, it requires to be presented in a simple
form so as to reach a final conclusion. With the help of statistics, a large amount of
data can be presented in condensed form.
● Increases the individual knowledge and experience: As the presentation of data is
simple, it enhances the knowledge and experience of people, by making it simple and
easy to understand, without having knowledge of each and every field.
● Different phenomena are compared: Statistics helps in making a comparison of
data and measuring the relationship between them. For example: Suppose a researcher
wants to measure the level of production of soybean in two states, then he/she would
use statistics.
● Helpful in the formulation of policies: Plans and policies are developed beforehand
in an organization. And statistics plays a very crucial role in determining the future
trends, so as to frame them, by providing the required information.
● Helpful in prediction and forecasting: The knowledge of statistics is not just helpful
in estimating the present but it also helps in forecasting the future
Divisions of Statistics
The different types or branches of statistics are discussed here under:
1. Descriptive Statistics: It involves describing and summarizing the sets of numerical
data with the help of pictures and statistical quantities. Techniques used may include
averages, dispersion, skewness, time series, etc.
2. Inferential Statistics: It encompasses those methods that are helpful in drawing
conclusion and inferences with respect to parameters of population, based on
estimates which are drawn from samples. Chi-square, F-test, t-test, etc techniques are
used.
3. Applied Statistics: Those methods and techniques are used in applied statistics which
are applicable to specific problems of real-life scenarios. Techniques used may
include sample survey, quality control, index numbers etc.
4. Inductive Statistics: Those methods and techniques are covered here which are used
to identify a specific phenomenon based on random observation. Techniques used
may include Extrapolation.
5. Analytical Statistics: Analytical statistics uses such methods and techniques that are
helpful in setting up functional relationships amidst variables. In this correlation,
regression, association and attributes techniques are used.
6. Mathematical Statistics: It deals with the application of different mathematical
theories and techniques to develop different statistical techniques. It uses techniques
like integration, differentiation, trigonometry, matrix, etc.
Importance of Statistics:
The functions of statistics are as follows:
1. Statistics simplifies complexity: Human mind cannot understand a large number of facts
and figures fit anyone time. Therefore, the important function of statistical methods is to
simplify the complex data into diagrammatic and graphic representation, averages and
dispersion, etc. The huge masses of data can be converted into a picture, a diagram, etc.,
which are easier to understand. For instance, we cannot remember the individual marks
scored by 50 students; but it is easy to remember the average marks of the students in a single
figure, say 75%.
2. It provides definiteness of information: One of the important functions of statistics is to
present statements in a precise and definite form. Numerically expressed conclusions are
more convincing. Because of this definiteness, the application of statistical methods has been
increased and has attained popularity in various sciences.
3. It helps in comparing data: Comparison is one of the main functions of statistics.
Statistics helps in comparing the data with respect to time and location. It also helps us to
compare one phenomenon with the other. People are greatly interested in relative figures
rather than absolute figures. By comparison one can easily appreciate the significance of a
series of figures, when compared with other figures of the same kind. The various means of
comparisons are ratios, averages, rates, coefficient, etc.
4. Statistics enlarges individual knowledge and experiences: According to Bowley, proper
function of statistics, indeed, is to enlarge individual experience. One can easily grasp ideas
from a condensed form of statistics, converted from mass. For example, say that the cost of
living in India has increased. To know the extent of the increase in the cost of living, we must
have a clear idea about the rise in price, which affects different income groups; we must also
ascertain the rise in prices of consumer goods etc. Statistics enables one to understand clear
ideas.
5. Statistics helps the functioning of Government: Statistics is essential for the proper
administration of a country. It provides information needed for the efficient conduct of
government business. The importance of statistics in the administration of a country is greatly
increased in the present times. The government uses statistics to have an understanding
before implementing schemes; e.g., old age pension, ration schemes, welfare schemes, etc.
6. Useful in studying relationships: The nature and extent of relationships between different
data can be measured by coefficient of correlation, coefficient of association, regression etc.
7. Useful in forecasting: The statistical technique for extrapolation is highly useful for
forecasting future events. It helps in forecasting the future tendency of a given phenomenon.
Statistics helps in making reasonably good forecasts.
8. It is useful in formulation and testing of hypothesis: Statistical methods are helpful in
formulating, testing hypothesis, and also in developing new theories. For instance, we can
verify the law of supply with the help of statistics. Like that, the success or failure of new
theories can be known easily with the help of statistical data. For example, statistics helps us
to measure the effects of monetary controls on price level. It provides guidance in the
formulation of new policies and theories at all stages and the drawing of plans in all fields. It
enables to measure the results on the implementation of plans and theories and give
suggestions from time to time.
Limitations and Misinterpretations of Statistics
Statistics is considered to be a science as well as an art, which is used as an instrument of
research in almost every sphere of our activities. Some of the limitations of statistics are as
follows:
1) Statistics Suits to the Study of Quantitative Data Only: Statistics deals with the study of
quantitative data only. By using the methods of statistics, the problems regarding production,
income, price, wage, height, weight etc. can be studied. Such characteristics are quantitative
in nature.
The characteristics like honesty, goodwill, duty, character, beauty, intelligence, efficiency,
integrity etc. are not capable of quantitative measurement and hence cannot be directly dealt
with statistical methods. These characteristics are qualitative in nature.
In such type of characteristics, only comparison is possible The use of statistical methods is
limited to quantitative characteristics and those qualitative characteristics which are capable
of being expressed numerically.
2) Statistical Results are not Exact: The task of statistical analysis is performed under
certain conditions. It is not always possible, rather not advisable, to consider the entire
population during statistical investigations.
The use of samples is called for in statistical investigations. And the results obtained by using
samples may not be universally true for the entire population. Data collected for a statistical
enquiry may not be hundred percent true. Statistical results are true on an average.
3) Statistics Deals with Aggregates Only: Statistics does not recognise individual items.
Consider the statement, “The weight of Mr X in the college is 70 kg”. This statement does
not constitute statistical data. Statistical methods are not going to investigate anything about
this statement. Whereas, if the weights of all the students of the college are given, the
statistical methods may be applied to analyse that data.
According to Tippett, “Statistics is essentially totalitarian because it is not concerned with
individual values, but only with classes”. Statistics is used to study group characteristics of
aggregates.
4) Statistics is Useful for Experts Only: Statistics is both a science and an art. It is
systematic and finds applications in studying problems in Economics, Business, Astronomy,
Physics, Medicines etc. Statistical methods are sophisticated in nature. Everyone is not
expected to possess the intelligence required to understand and to apply these methods to
practical problems. This is the job of an expert, who is well-versed with statistical methods
5) Statistics does not Provide Solutions to the Problems: The statistical methods are used
to explore the essentials of problems. It does not find use in inventing solutions to problems.
For example, the methods of statistics may reveal the fact that the average result of a
particular class in a college is deteriorating for the last ten years, i.e., the trend of the result is
downward, but statistics cannot provide solution to this problem.
It cannot help in taking remedial steps to improve the result of that class. Statistics should be
taken as a means and not as an end. The methods of statistics are used to study the various
aspects of the data.
