INTRODUCTION

The term statistics is generally used to mean numerical facts and

figures such as agriculture production during a year, rate of inflation
and so on.

However as a subject of study ,statistics refers to the body of

principles and procedures developed for the collection, classification,
summarization and interpretation of numerical data and for the use of
such data. Statistics is a set of decision making techniques which aids
businessman in drawing inferences from the available data.
MEANING OF STATISTICS
 SINGULAR SENSE PLURAL SENSE

The term statistics refers to a The term statistics refers to

science in which we deal with numerical statements of facts
the techniques or methods relating to any field of enquiry
for collecting , classifying, such as data relating to
presenting, analysing and production,income,expenditure
interpreting the data. population, prices etc.
DEFINITION OF STATISTICS
 SINGULAR SENSE PLURAL SENSE

Statistics may be defined as Statistics are numerical

the collection, presentation, statements of facts in any
analysis and interpretation of department of enquiry placed
numerical data. in relation to each other.

Croxton and cowden Bowley

FEATURES OF STATISTICS
FEATURES OF STATISTICS Singular SENSE
1 Collection of Data 4 Analysis of Data

Interpretation of
2 Organisation of Data 5 Data
3 Presentation of Data
1 Collection of Data
Collection of relevant data concerning a problem is the first step in statistical
method. Depending upon the problem under study, it is decided as to how,
when and where and what kind of data are to be collected

Organisation of Data
2 The second step is to organise the collected data. With a view to rendering the
collected data more comparable and simple, it is classified on the basis of
time , place and quality, etc.

Presentation of Data
3 To make the data intelligible, brief and attractive, it is presented in the
form of tables, diagrams and graphs.
4 Analysis of Data
To draw conclusions it is necessary to analyse the data. Methods of
Analysing Measure of central Tendency, Measure of variation,
Correlation etc.

5 Interpretation of Data
Conclusion are drawn after analysing the data. Two or more kinds of
data are compared and conclusions drawn.
FEATURES OF STATISTICS Plural SENSE
1 Aggregate of facts 4 Reasonable accuracy

Placed in relation to each

2 Numerically expressed 5 other
3 Affected by multiplicity of 6 Pre-determined purpose
cause
7 Collected in symmetric
manner
1 Aggregate of facts
A single number does not constitute statistics. It is only aggregate of facts
capable of offering some meaningful conclusion that constitute statistics.

2 Numerically expressed
Statistics are expressed in terms of numbers. Qualitative aspects like small
or big, rich or poor etc. are not statistics.

3 Affected by multiplicity of cause

Statistics are not affected by any single factor. These are influenced by
many factors simultaneously.
4 Reasonable accuracy
A reasonable degree of accuracy must be kept in view while collecting statistical
data. This accuracy depends on the purpose of investigations, its nature, size
and available resources

5 Placed in relation to each other

Such numerical alone will be called statistics as are mutually related and
comparable. Unless they have the quality of comparison, they cannot be
called statistics.
6 Pre-determined purpose
Statistics are collected with pre-determined objective. Any information
gathered without any definite purpose will only be a numerical value and
not statistics.

7 Collected in symmetric manner

Statistics should have been collected in a symmetric manner. Before
collecting them, a plan be prepared. No conclusion can be drawn from
statistics collected in haphazard manner.
SCOPE OF STATISTICS
 SCOPE OF STATISTICS

1 NATURE OF STATISTICS
It is a science or Art.
As a science, statistics studies numerical data in
symmetric manner and as an art, it makes use of data
to solve thee problems of real life
 SCOPE OF STATISTICS
1 SUBJECT MATTER OF STATISTICS
DESCRIPTIVE STATISTICS
It merely describes the data and consists of the methods and techniques
used in the collection, organisation, presentation and analysis of data in
order to describe the various features and characteristics of such data.

INFERENTIAL STATISTICS
It helps the decision maker to draw conclusion about the
Characteristics of a large population on the basis of sample results.
FUNCTIONS OF STATISTICS
FUNCTIONS OF STATISTICS
It helps other sciences in testing
1 Expression of facts in 6 their Laws
numbers
Establishes Relationships
2 Simple presentation 7 between facts

3 Enlarges Individual 8 Helps in Forecasting

Knowledge and Experience

4 It compare facts 9 Enables realisation of Magnitude

It facilitates Policy Presentation of data in

5 Formulation
10 condensed form
1 Expression of facts in numbers
One of the principal function of statistics is to express facts relating to
different phenomenon in numbers. Statement is vested with certainty
when facts are expressed in numbers
2 Simple presentation
Statistics renders complex data very simple by expressing it in terms of
aggregate, average, percentage , graphs and diagrams

3 Enlarges Individual Knowledge and Experience

Statistics enlarges an individual's knowledge , experience and power of
reasoning. One can understand clearly and precisely such concepts as
Famers national income, population etc.
4 It compare facts
Function of statistics is to compare the data relating to facts . Data
have no meaning unless these are compared and inter-related.

5 It facilitates Policy Formulation

Precise nature of each problem can be ascertained from the analysis and
interpretation of data. As a result of it, some policy may be formulated.

6 It helps other sciences in testing their Laws

Statistics also helps in testing the laws of other sciences . Many laws of
economics, namely, law of demand etc.
7 Establishes Relationships between facts
Tools of correlation of statistics tell if two facts have any relation
between them or not and what kind of relation it has?
Helps in Forecasting
8 Statistics helps in forecasting changes in future with regard to a problem .
Forecast can be made with regard to changes in future , supply of power etc.

9 Enables realisation of Magnitude

Statistics enables realization of magnitude of a problem.
Presentation of data in condensed form
10 Primary data are very much complex and haphazard . such complex data make
it impossible to draw any conclusion. Statistics present complex data into a
condensed form.
IMPORTANCE OF STATISTICS
USES AND IMPORTANCE OF STATISTICS
1 Importance for 6 Importance for banking
administration
Importance for insurance
2 Importance for 7 companies
businessman
Importance in the field of
3 Importance in political 8 Education
fields
Importance in the fields of
4 Importance in the social 9 science and research
fields
Importance for economic
5 Importance in economics 10 planning
1 Importance for administration
Finance minister make use of data relating to revenue and expenditure while
preparing budget.

Each government formulates its policies concerning family

Planning, establishment of new industries etc. on the basis of the data.

Government makes assessment and measure efficiency of its different departments

like health, education etc.

Statistics prove helpful in taking decisions with regard to the defence of the
country, armed forces etc.
2 Importance for businessman
A successful businessman or agriculturist estimates demand for and supply of the
commodity on the basis of relevant data.
It is necessary for the businessman to know the nature and place of demand of goods that
they are dealing in and what is the future policy of the government and the possibility of
changes in the price.

3 Importance in political fields

Politicians play an important role in designing the economic, social and educational
policies of the country.
It is very essential for the politicians be aware of the statistical data.

Policies of the party in power can give wide publicity to the achievements of their
government on the basis of statistical data.
4 Importance in the social fields
To a social reformer , statistics relating to such social evils as dowry, alcoholism, divorce etc.,
are of great significance. They can suggest remedies against these evils only when they are
equipped with relevant data.

5 Importance in Economics
Consumption How a consumer can get maximum satisfaction is determined on the basis of
data pertaining to income and expenditure.
Production A producer aims at earning maximum profit on the basis of data relating to
cost and revenue.
Exchange Price of commodity is determined on the basis of data relating to its buyers,
sellers, demand supply, cost profit etc.
Distribution In the determination of factor income, rent, wage, interest and profit,
statistical data play a significant rule.
6 Importance for Banking
To every banker and banking industry, statistics relating to demand deposits, time
deposits, credit, etc., are of great significance. Progress of banking industry in a country
is measured in terms of statistics concerning total deposits, loans of primary sector etc.

7 Importance for insurance companies

Insurance companies determine the rate of insurance premium on the basis of statistics
relating to average expectancy of life in the country. Expectancy of life is calculated on the
basis Life tables. These tables depend on the theory of probability.

8 Importance in the field of education

Progress in the field of education is measured in terms of literacy rate of population,
number of schools , colleges and universities in the country and number of students
studying therein. Shortcomings of education system are known from the data relating to
examination results of the students.
9 Importance in the field of science and research
Statistics is used in both propounding and verifying scientific law.

10 Importance for economic planning

Priorities of Planning are determined on the basis of the statistical relating to resources
base of the country and the short-term and long-term needs of the country .
LIMITATIONS OF STATISTICS
LIMITATIONS OF STATISTICS
1 Study of Numerical Facts 6 Without Reference Results may
Prove wrong
only

2 Study of Aggregates only 7 Can be used only by experts

3 Not the only method 8 Misuse of statistics in possible

4 Homogeneity of Data 9 Only means and not a solution

Results are true only on an

5 average
1 Study of Numerical Facts Only
It does not study qualitative phenomenon, like, honesty, friendship,
wisdom, health etc.,

2 Study of Aggregates only

Statistics studies only the aggregates of quantitative facts. It does not study
any particular Unit.

3 Not the only method

Statistical method is not the only method to study. Many a time this
method does not suggest the best solution of each problem.
4 Homogeneity of Data
To compare the data, it is essential that whatever statistics are collected, the
same must be uniform in quality. Data of different qualities and kinds cannot
be compared.
Results are true only on an average
5 Laws of statistics are true only on an average. They express tendencies. They
are not valid always and under all conditions.

Without Reference Results may prove wrong

6 In order to understand the conclusions very well, it is necessary that the
circumstances and conditions under which these conclusions have been
drawn are also studied, otherwise thet may prove wrong.
7 Can be used only by experts
Statistics can be used only by those persons who have special knowledge of
statistical methods.

8 Misuse of Statistics is Possible

Misuse of statistics is possible . It may prove true what actually is not true.

9 Only Means and not a solution.

Some scholars are of opinion that statistics are only a means in the
solution of any problem. It is not a solution to the problem
DISTRUST OF STATISTICS
 DISTRUST OF STATISTICS

The main cause of the mistrust is that most of the people

believe statistics readily . Thus, to take undue advantage of
their credulity , some selfish people make misuse of statistical
data . They can present the statistics in such a distorted way as
to prove right what is wrong and wrong what is right.
EXAMPLE
The government claimed that in 1994-95,per capita income in India
increased by about 5 percent and as such economic planning was a
success . On the other hand the opposition party claimed that is
1994 95,per capita income increased by 1.5 percent only and such
economic planning was a failure. Statistics presented by the
government as well as opposition party are correct ,the only
difference is that government statistics are calculated at current
prices while the statistics presented by the opposition party are
calculated at 1980-81 constant prices.
MAIN CAUSE OF DISTRUST
Different kinds of statistics are obtained in respect of a given
problem.
Statistics can be altered to prove predetermined conclusions.
Authentic statistics can also be presented in such a manner as to
confuse the reader.
When statistics are collected in partial manner ,the results are mostly
wrong.
REMEDIES TO REMOVE
DISTRUST
 REMEDIES TO REMOVE DISTRUST
Consideration of statistical Limitations
While making use of statistics , limitations of statistics must be taken care of , for
instance , statistics should be homogenous.
No Bias
Research should be impartial . He should make use only of proper data
and draw conclusions without any bias or prejudice.
Application by experts
Statistics should be used only by experts . If they use it carefully and
scientifically , the possibilities of errors will be little.
IMPORTANT QUESTIONS
 IMPORTANT QUESTION

1. Define Statistics and Discuss its functions and limitations.

2. Explain the functions, importance and limitations of statistics.
3. Discuss the distrust of statistics.
4. Define statistics as a subject. Also bring out its scope.