CHAPTER i INTRODUCTION The word ‘statistics’ seems to have been derived from the Latin word ‘Status’ o Italian word “Statista’ or the German word “Statistik? or the French word ‘Statistique’, each of which means a political state It is not a new discipline, but is as old as the human society. In good old days, the term statistics was applied to a branch of statecraft—science of statecraft. As such, the term statistics was applied to mean facts and figures which were needed by the State in its day to day life. Statistics was regarded as a by-product of administrative activities of the State. Now statistics is usually not studied for its own sake (as a separate branch), but statistics is employed as a tool in solving or analysing the problems of the State. Origin Inaancient times the scope of statistics was primarily limited in keeping the records of the population in regard to age and sex-wise, birth, death; property, wealth, etc., of a country. This knowledge was used as a tool to know the man-power and also to fix taxes and levies. Statistics in the ‘past was a by-product of administrative activity of the State. The State or the Government collected statistics for administrative purposes, and as such statistics was regarded as ‘the Science of Kings’ or ‘the Science of Statecraft’. Many people contributed to the development of statistics. i Sixteenth century astronomy contributed to the growth of statistics. Tycko Brave (1554 to 1661) discovered valuable facts regarding the movements of stars and planets and compiled records to make predictions of eclipses and positions. J. Kepler made a detailed study of the information collected by Brave, analysed and thus found three laws relating to the planetary movements, These laws gave a basis to Newton for the discovery of the Law of Gravitation. alley prepared the first life-table from the data collected by Sir William Petty (1623-1687). He also prepared mortality tables and analysed them. This led to the idea of life insurance and the first Life Insurance Institution was founded in London in 1698. Eighteenth century, Sussimilch (1707-1767) found out the natural order of physiocratic School; i.e, “ratio of births and deaths remains constant” and gave statistical explanations to the theory, J. Bemoulli (1654-1705) discovered the law of large numbers, Laplace (1749-1827) published the ‘monumental work on the in 1782, Later on prominent mathematicians like Lagrange, Gauss Lexis ae: further contributed to the theory of probability. (1822-1921) pioneered the study of “ isis”, So Jevons “the father of index numbers” (1835-1882) who is known as developed the technique of analysis oftime series. Karl Person (1857-1936) pioneered the study of Correlation Analysis. His Cot souare at i| Statistics Theo 2 ss of Fit isthe most importaat’of the (ests of significance in ae oN Prag test of oon s001962), sho i called "he Father of Statistics” crew many sont 8% Sis A. Fis aj data, He applied statistics to many fields—geneties, psychology, eduction’ or aaa propounded many concepts and tests, Movo described hii tion, Ri Seciopment of the theory of statistics,” “ The development of modem statistics started after Industrial Revolution, a, ia: wgtatisties of a sort can, of course, be traced back to ancient times, but they have lo the Industrial Revolution, Beginning in the 19th century, statistical records were describe the society of that cra, and to throw light on its economic and social problems pe they influenced the course of men’s thinking then, and even in Some instances, may hie dy new policies and new laws, but primarily thelr uses were descriptive.” leg Twas in the second half of the 19th century and in 20th century that Statistical entered the realm of the science of economics, commerce etc. and became intimately x with the ancient subject of mathematics. The relationship of statistics and mathematics ic va but it is only during the last 100 years or so that the two sciences have come very close 7." other. Recently, the domain of statistical methods have considerably widened and toda, , is hardly any science which does not make-use of statistical methods. The science of sy,” is now associated with all other sciences in some form or the other. The science of stats received a lot of contributions from economists—Cournot (1801-1877), Leon Walras (1 834.5 Pareto (1848-1923), Marshall (1842-1924), Edgeworth, Bowley etc. They gave an applied form, ssibject. Increasingly in the 20th century, and especially'since World War I, statistics have :. used to settle problems. and to determine course of action. 88 “Real gigi ny Growth i MH In the present age, statistics is regarded as one of the most important tools for taking decisio- All the branches of science make use of statistics. Statistics helps in forming suitable policies, such it is being used in all the fields. In science, statistics is freely used. In research work, it got its own status as a tool of research. Thus in every situation there is a demand for Statistic ‘The sampling techniques further reduce the cost of statistics. This is because by studying a px of the population, the characteristics of the whole population can be known. Thus the incressis demand and decreasing cost of statistics gives way to growth. In all the countries of ancient culture, where history has been written, proofs are avail2d that they had a system of collection of date, Statistics is now regarded as one of the most depend. tools for taking decisions in the midst of uncertainty, ‘Before going into thelimportance and functor of statistics we have to consider two important factors which have contributed to the tremendow growth and development of statistics: (f) Increased demand for statistics, and (ii) Decreasing cos @ Increased demand for Statistics: Statistics is indispensable for any government {0 efficiently conducting the administration, formulation of sound policy and its effect implementation. A government also collects information which helps to evaluate the strengt and weaknesses of its economy and adjust the tax structure accordingly, This was the reas! i desrbing statistics as the or Alibrenete of economies like production, consumpti i Planning and control are the have to think of statistics, Plan advanced and competitive world, a to produce, where to produce, hy Whenever we think of a plan w¢ 8 cannot be devised without statistics. In this technically Producer has to make a number of decisions such as wha! how to produce, where to sell, at what price to sell etc. Such3 tt i atistics. mec jons depend upon sound forecasting and forecasting cannot be made ones aaee eee Marshall observed that “Statistics are the straw out of which I, like any of ¢ such its need ae d to make bricks”, Statistics helps in formulating suitable policies and Aiand ‘of the pevpereasingly felt inal the fells. A businessman seeds infornnton on daily end ot is pets, seasonal changes in demand, priees of competitive products ete. All these p edolved in the light of factual inferrrencn cons hence the need for statis, is asing cost of statistics: Statistical techniques have improved so greatly that i aes (19 Besrecessary to investigate all the items an any group from which we may wish to colle mermation. Instend, we can earry out a survey sy, ofa population, by merely investigating inftion (~ sample). Fisher suns up the advantages of sampling techniques over complete 2 Lie jin just four words: Speed, Economy, Adaptability and Scientific Approach. Ina san P! Sarvey there is reduction in the cost of collection of the information, administration, training ste Thus the cost and the time required for the collecting one ko down appreciably. Aga, ‘vith the availability of electronic machines, calculators computes ee; the cos of analysing data has considerably gone down. The theory of sampling and various designs of experim and statistical quality control have contributed towards lowering the cost of collection and analysis of statistical data, ining a bata has been defined by various authors differently. In olden days, Statistics meant the data inrelation to the activities of the State collected for official purposes, but gradually it gained broader vi ing, because of its wider applicability in various problems apart from the State activities, Again, inthe intial period the role of statistics was confined von eee es. As such, most of the experts gave a narrow definition, However, over a long period of time as its role gradually expanded, statistics came to be considered as much wider in its scope and, accordingly, the authors or the experts gave a wider definition of it, r. When used as , it means the science grown immeasurably. It is not where statistics does not creep in. The science of through ages. Statistics has been defined in different rs and even the same author has defined it in different ways on different Possible to find any sphere of human activity, statis is occasions, As said above, different authors have different defi definition aims at laying down the meaning, the scope ai aim may not be fulfilled, if there are many definitions, atleast a few definitions, There have b initions of statistics from time to time. A ind the limitations of a subject. The very But to have a clear idea, one should studyON DATA A. STATISTICS AS Sealed aa (aumerical data) are: A, STATI tisligs a8 stat b ; Some definitions of wigeel Statement of facts In any depariment of enquiry places i, "el, “Statistics are mt a boy, a ‘ ls and provides com, arative 4 tO, PIMEP Bo ortance to numerical aspec Parative g, ve definition gives imp. lu The above de! . ions of the people maState....¢, of figures, ified facts respecting the conait g Pecia), “tse he antes aspeais te any other tabular or classified arrange those facts which can ha numer, Statistics Theory ang Prag og ical terms can be terme is definit that only numerical js definition reveals that ; be te Sa Wonder statistically, This narrows down te seo er sates, because he defines statistics and restricts it a cond aia Skule hese all sciences—social science, soci . “By statistics we mean quantitative data affected to a marked ex; d as statistics; non i Of statistics ag inadequay,« ion of the people ofthe State natural science, etc tent by multiplicity cays. Vile and Kens, . For example.» demand, competiti loes not possess al] ‘is definition refers to numerical data affected by a multiplicity of causes Price of a commodity depends on a numiber of factors—supply, Gireulation of money, ete. This definition is also incomplete, as itd ion in the may Of statistics. the characters. tics. Statistics deals with Sroups, but not individual ite For inst birth, one death €tc., cannot be called Statistics. But the aggregate of fj iccidents, births, leaths, etc., over different tim can be called st cause the study goes in relation to each other of comparison, A single accident j ics, But the total number of accidents of a city d OF a quarter or hal fatistics. The total of accidents in the city during a month can © compared with Nf ious months to know Whether the accidents have decreased Or increased, Thi. 30 be compared with other Cities, i. om ae arked extent by q suultplcity of causes: Quantitative data c Sociology, °Y @ number of factors, Social Sciences—economics, history, seiences. In ‘any factors, Statistics is most commonly used in social item, becaue, » TiS possible to isolate the effect: of Various factors on an Said to be reg easured numerically, Y A number of One cause alone cannot be > the fall in Sales of "market condition, general fa commodity is affected Tecession in trade, storagece currency citeulationsimport, export, competition i faeossble 10 ‘Mople out one cause, All the , competition in market, consumer taste, ete, It is responsible for the decline of sale: se factors acting jointly will determine the factors . statistics are numerically expressed: : 3 il ey goa noe dei ae jen! data alone constitute statistics. Students can be fey ane in qualitative expe nH, poor eto, on the basis of their performance in tests. Bat sties—onesty emt Tall afb ne statistics. In particular, the qualitative charities. I the’ ate eNpres Bev auies a which cannot be measured numerically are then they can be called statistics. Another Saige ben (anarks) as numerical standards, are assigned, then the quantitative measure ee fhe ‘competition of girls; if ranks a “Seatistics should be enumerated or estimated: ee ad ihe ae Ei enquiry can be obtained cither by enumeration (by éunl oo cat petining 0 ay field of enquity is not large, enumeration (actual ousting) oa eed. If sald of enquiry is wide and large, enumeration is out of question; and in such cases i ‘ . be seated. For instance, inthe B: Com. class there are 60 students; this Wacase of eu rat (We count the number Of students), Atthe same time we may say’ that 1,00,000 pe ‘cat ded the Independence Day Celebration; it is a case of estimation tration). ca 5, Statistics should be collected with reasonable standard of accuracy: A reasonable standard Sfaccuracy isneeded in both enumeration and ectimation, For instance, ifthe weights ofstudents gre being measured fractions of kilogram (say 1/10th or 1/20th) can be ignored; when measuring the distance from ‘Madras to Kanyakumari fraction of a kilometer can easily ‘be ignored. No te fst rule can be [aid down forall e356 Hence mathematical accuracy cannot be attained in statistical studies. a 6. Statistics should be collected in a sys data should be collected in a systematic be wastage of ‘time, energy and money. rich people, ignoring the poor, it will only inflate the national data collection must be decided in advance, and the investigator must If the object is not known to the investigator, it is possible that he may collect data, which may not be of any use ‘while ignoring necessary data. Thus, without a pre purpose, the collected data may not yield the desired results. 7, Statistics should be placed in relation to each othe Statistical data for the purpose ‘of comparison. In order to make valid comparison, the data should be homogeneous, /.€., they, should relate to the same phenomenon or subject. For instance, weights of the boys in a class are to be compared with the corresponding weights of boys in another class. But it would be meaningless to compare the height of the students with the height of trees. Thus, the definition of statistics given by P: haustive. It brings out all characteristics which STATISTICS AS STATISTICAL METHODS has been defined differently by dif introduction facilitys tematic manner for a pre-determined PUPOSE: The table plan. Ifnot, there will manner through some suit ct the income data from For instance, when we colle + income data. The purpose of be aware of the purpose. unnecessary -determined are mostly collected. of, Horace Secrist is regarded as best as it is statistical data should possess. term statistics in this context ferent authors. A few definitions ; given below: 1 atest bia called the scien’ AL, Bowley 2 Of | counting.”Statistics Theory and p i Tay ting. But in many cases, we collect dat fe ct, hes count { ‘lect data 4, s nate classification, tabulation, ctc., have been ignoreg As, ne icy > id incomplete, f ‘rion is inadequate art ite Cs definition ¥ ay rightly be called the science of averages. bis 2, “Statistics i at averages are widely used to summarise the collected data, 7 a Ics no dou or device, The other devices like diagram, graph, correlation cote isnot the nckuded, This definition is also incomplete, ae ies i the science of the measurement of social organism as «rho hn 3, “Statistics 18:0 ” see qaileraten, ciological field only—that of man and hi " The definition limits the scope to sociologi ly activ, ition is inadequate. the definition is ina a on ley who himself realised the limitations, remarked that “Statistics cannot bec, nly, It covers o” estimates. The ol to anyone science.” : ‘4, “Statistics is the science of estimates and probabi f “te ~Bodi, "This definition is narrow, as the other methods like enumeration, classification, analysi, oe been ignored. Therefore, this definition narrows down the scope of the science of sx, is ing decisions in the face of uncertainty” “Statistics isa body, of methods for making 5. “Statistics is a body Wallis and pos, =C) i Croxton and Cowden have given a simple-definition of statistics. This definition is ces concise. The data ae collected to study a particular problem. The collected data in mass be converted in the form of diagrams, graphs etc. According to this definition, there are Stages— Collection of data, Presentation of data, Analysis of data and Interpretation of és, However, one more stage may be added and that is the organisation of data. Thus, ther. Jive stagesy (©) Collection of data: The fist step ofan investigation isthe collection of data, Careful collec is needed, because further analysis is based'on this, There are different methods of colle. of data (census, sampling, primary, secondary etc.) and they must be reliable, If the cola data are. faulty, results will also be faulty. Therefore, the investigator must take special c in collection, (©) Organisation of dara: A lange mass of figures that are collected from a survey frequently neess organisation. The colle organis ted data mustibe edited very carefully so that the omissions inconsistencies, irrelevant answers and wron '8 Computations in the returns from a survey ms) be comtected or adjusted. After the data have been edited, the next step is'to classify them me uae eee isthe organisation of the figures in such a form that their significance, i feclltaea, cal ri , fn, be @ppreciated, that comparison with masses of similar data may " andtabilatin, Casement analysis inay be possible. This is done through classification heads in which the wt ou refers to the determination of various classes, categories or, group and placing of te ie Shall be distributed and tabulation refers to actual sorting of classification, well-designed and systematic tables according to a given mode “© Presentation o : f i beclassifed acy, tamara leet Gata ‘are generally in an unintelligible form and need 0 *¥ can be analysed. For example, the investigator is interestedintroduction a to know the average income of 1000 families of a village. The mass data collected should be difficult to understand and analyse, Therefore, the collected data are to be presented in tabular or diagrammatic or graphic form, The data presented in a systematic order-will facilitate further analysis. (a Anabysts of data: Afeer the presentation of data, the next step is to analyse the presented Gata, Analysis includes condensation, summarisation, conclusion, ete., through the means of measures of central tendencies, dispersion, skewness, kurtosis, correlation, regression, etc. interpretation of data: Figures do not speak for themselves. The duty of the statistician is not complete with mere collection and analysis of data. But, valid conclusions must be drawn onthe basis of analysis. A high degree of skill and experience is necessary for the interpretation. Correct interpretation leads to valid conclusion. Seligman’s definition is also similar to that of Croxton and Cowden. He defines, “Statistics js the science which deals with the methods of collecting, classifying, presenting, comparing and interpreting numerical data collected to throw some light on any sphere of enquiry.” ‘According to Ya-Lun-Chou, “Statistics is a method of decision-making in the face of uncertainty ‘on the basis of. numerical data and calculated risks." Thus, future course of events can be forecast through the interpretation of data. According to Wallis, “Statistics is a body of methods for making wise decisions in the face of uncertainty.” © Nature ‘The statistical methods are inductive in their nature, because generalisations result from individual tion, Generalisations made after a statistical investigation show that they are true on the average. ‘They do not describe the behaviour of individuals but show typical behaviour of all the items. There is greater stability in masses than individual items. The statistical generalisations provide estimates of the characteristic behaviour of populations but not of individual person. observat Object ‘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. of 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, analysing and drawing valid inferences from them. This is so because statistics helps in drawing conclusions from facts affected by a multiplicity of causes in any department of enquiry. Statistics has become so much indispensable in all phases of human endeavour that it is remarked “Statistics is what statisticians do.” “Without an adequate understanding of the staltistical methods, the investigator 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.” “The real purpose of statistical methods is to make sense out of facts and figures, to prove thotStatistics Theory and p rf coves anything. It is only a tool, i a ing nor disappré il ves anything taking wise decisions and if misusey’ my the ace neither pro 4 statisti ee vaed properly, they help in of appro han good. aera i harm than Bi properly used, the fault does not lie-with the science OF sig : vsing it.” ay bt with the person Or aL facts, but statistics is a body of methods for making decisi,, an Icteness or the unstability of the information ."”’ i i ON ay, ractical purpose of selecting a course of actin! No, wgtatistics are num there is uncertainty arisit The decisions may be ™ the scientific purpose of Is Statistics a Science or Art? A d needs a systematic and comprehensive discussion. Before a is a difficult question an , rehens! Se caer hould understand “What is a science” and “What is an an the above statement, one SI Webster's dictionary defines science as “accumulated and accepted knowledge that ha gystematised and formulated with reference to the discovery of general truth or operation of. Taw”. In other words, science is a body of systematised knowledge. Any branch of knowlea be called @ science if it possesses the following characteristics: ee 1, Laws of science should be based on cause and effect relationship. 2. Its knowledge should be systematic and its, methods should be logical. ct Beng x omemtid body of knowledge based on certain principles, science is capet ing from the incomp nade either for.the pi gaining general knowledge. 4. Its laws should be capable of forecasting the future course of action of a phenom 5: Its principles and laws have a high degree of precision. a Characteristics of a stience are the observation i : of certain fa ‘ of relevant material, and the use of these as a basis for ation Then ees cts, ic generalisation. Then it becomes pos: catia d ett fundamental ideas vo3) Method is a part of '¢ help of statistics. It explains the facts. As ee te method and is based on the same of systematised knon nough to forecast the future path can be eal Websters i alled as a sei iowledge th; f iti cien at states ; ae experience: acti art as “skit true facts after analysis Art do a i eS Not,qd Introduction part is a system or rules for the attainment of a given end. 5 art teaches us how (0 do things. art js a practical applications of a set of rules or principles to practice. fas other social sciences it deals with human beings. The behaviour of human beings cannot be measured ‘accurately as those of sciences, or fates possesses all these important charactristies and so it may be concluded that it is art. By science we can know a thing, by art we ean do that thing, Statistics is regarded as an at plying the science of scientific method, Statistics as an art, gives us solutions of various ar of a7 ep of idex er onl endncies te, AM el ‘with ways and means Prnandling data 10 draw proper conclusions, On these basi, sttisties can be regarded as an art. From the above discussion, we can conclude that statistics is both science and art. Tippet says aypis both a science and an art. It is.a science, as its methods are basically systematic and have general applications. it is an art, as its successful application depends to a considerable degree Sy the skill and special experience of a statistician Or tities, 8 2 Subject, has been now introduced at all level of education in India and elsewhere. risabranch of science used in dealing with phenomena that can be described numerically by counts or by measurements. It refers to quantitative information or the method of dealing with quantitative information. It is @ branch of applied mathematics. A logical question that arises in the mind and that needs to be answered is why should all students be required to study statistics” ? Every person will have to make decisions of one type or the other, and more tools they have at their disposal to help them to make good decisions, the more likely they are to succeed in life. Statistics, as you ‘will study from the following pages, is concerned with the problem of obtaining useful information om numerical or raw data. Almost every aspect of human and other activities is now subjected to measurement and interpretation in terms of statistics. The figures have become so important in human affairs that they form the basis of rational thinking and rational decisions in many spheres of human activities, and events are proving that the “decisions based on figures yield better results, the reason being that the knowledge obtained with the help of statistical methods and supported by numerical facts is accurate and precise.” For example, it may. relate to population, birth, production, profit etc. ‘Analysis of such statements can help in framing suitable policies and conclusions. Statistical methods are powerful and important tools with which we can interpret the complex world of today. Statistics provides techniques for discovering knowledge and for simplifying large mass of-data. Management at all levels is guided by facts obtained through analysis of records rather than by knowledge obtained merely through personal observation and experience. Statistical Thinking Statistical thinking is concerned with the qualitative characteristics of a mass of items and differences within this mass, For example, labour force in India comprises of mass of items; and the mass of items may be differentiated according to age, Sex, qualification, income, occupation etc. There arise variations in each of these aspects and the’ study of such variations is a main concern of statistical thinking, What statistics is concerned with is the variation in characteristics of masses. Thus, making, comparisons between masses or within a mass is a basic activity of the statistician. Thus statistics can be called, an art of comparison, For example, when we generalise from a few cases to a large number, we employ sampling process. Or when we draw a conclusion. even two things which go ogether involves a thinking of statistical correlation. Statistics is a fundamental activity ofweetes theory. ang 0 QUESTIONS Questions = ile objective Tye case, whether it is true or false 1 Indicates re is not statistics. ions, ber of factors. 1. A single figure which implies numerical data, 2. Statistics has hardly any limitati i d by a num! istics are affecte Fen ugtatistics” has only one meaning, 4 : A istic t be misused. 5, Statistics canno' iB. 6 All facts mumerically expressed are tea oe 7, Descriptive statistics deals with ‘how’ and ‘why’ of a p! ‘ The conclusions obtained statistically are universally true, 3 : ‘Statistics is a science of counting”. It is one of the most comprehensive definjy),. 2. “Stal 10, Sometimes statistics is used to suppress unfavourable results. [Ans: True— 1, 3, 10. False—2, 4, 5,,6,.7, 8, 9]. IL Fill in the blanks: : j 1. “Statistics are the ......... of which I, like every economist have to make 5, Marshall. in the face of uncertainty on the basis of numerical ¢2:, 2. “Statistics is a method of calculated risks.” Chou. 3.A single figure is... 4. The word “statistics” is used in ... 5. Statistics deals with only .......... data, 6. The word statistics is derived from the Latin word 7. “Statisticd is like clay of which you can make’ a . [Ans: 1. Straw; 2. Decision-making; 3. Not; 4.Two - Singular, 6. Status; 7. God, Devil]. IIL Tick the correct answer: 1. Statistics can be considered as; (a) An art ; i (c) Both art as well as Science, {ey Selene 2. Statistics can; : (@) Prove anything () Disprove ‘anything (©) Neither prove nor di nor dj i ‘ 3. Which of the follow 'Sprove anything: but is a tool, , Owing statements is not () Statistics deals with quantitatir ae (0) Statistics 4 ‘ative data (6) Statistics a i iv 4 The real gaint et cover graphical devices, oe sigeyative date (Fister Cory of statistics jg: i (©) Bowley .. Statistics. and ..... .. senses, namely... as you please”. King Plural; 5. Quantitative (6) Gauss (@) Pearson,introduction 5, In th ¢ development of statistical methods, the greatest contribution is that oft (a) Economists (6) Mathematicians (0) Scientists. 2. (c); 3- (os 4. (ays 5. (BY). [Ans: |. Os THEORETICAL QUESTIONS 1, What is statistics? (B.Com.Gujrat) 2, Discuss the meaning and scope of Statistics. (B.Com. Bangalore) 3, what are the characteristics that Statistics should possess? “1 ssttisties are numerical statements of facts in any department of enquiry, placed in relation * to each other.” Explain. (M.A. Madras) 5, sstatisties is a seience of counting.” Comment and give comprehensive definition. (B.Com. Osmania) 6. No isolated facts constitute Statistics.” Explain. 7 Explain the definition of Horace Secrist, ¢ “Statistics is the science of estimates and probabilities.” Comment. 9, “Statistics was originally concerned with matters of the State and was regarded as the science of Statecraft.” Explain the statement. 10. “Statistics is said to be both a science and an art.” Why? (B.Com. Kerala) ML 12. 15. 14. 15. Examine critically the important definitions of statistics, pointing out the one which you think the best. Explain the origin and development of science of statistics. (B.Com. MS) Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write. “statistics are numerical statements of facts but all facts numerically stated are not statistics”. Comment. (B.Com. MK) «There is hardly any field. which does not fall within the. scope of statistics.” Comment. toby fu2 NCTIONS, LIMITATIONs IMPORTANCE, FU {s into simple and understan,), Sa tall hands of mankind to translate complex ec tistes has improved remar\,,. Suatisics ea ool Me end of the 19th cent, he they tO statements of ey = Sabiyanduse, the science of satsties ieee in. According to Bowle aman nine aera: guage or of algebra: it may prove ,j tivity, to find any sphere of human ac foreign lan y = istics is like a. knowledge of forelg it is useful in other fields, randse Seas scumstances.” We shall discuss how it is us at any time under an) i lates E oa ne supplies essential information to run aigovernment. In o\; ae eae e aragos of kings’. Different policies of government are b; on statistics. Statistics is of great help in promoting human welfare. meena six le. Before:adopting : fe State may accept or reject of policy on the basis of statistics. Periodical collec: of data relating to population, national wealth, agriculture, exports, imports, education, crime, e: are the main guidelines to the government for a good administration, Therefore, it is rightly "In all the countries, the government is the sing but biggest collector and user of statistics. Moreover, all the departments of a government depe: Seca for efficient functioning. The main collectors of statistics in India are the Cann Statistical Organisation, National Sample Survey Organisation, ete. : Statistics in Economics data, The laws f fc Hes Without app hi 8S resulted in a new branch43 in the period after the Second stance, Functions, Limitations cs led to the Econmetries is a relatively new branch of study developed mostly world War. The increasing interaction of mathematics and statistics with economi t iscipline called Econometrics. 11 is dependent upon Economic Theory, Stat istical nomettics aims at making Eeonomics a more realistic, Impor Natopment of a new etree togical and practical sefence. Fconometrie models based on sound statistical ana Py for maxinnar> exploitation of the available rensources. statistics in Business Fre pigger the concem, the greater is the need for statistics, In good old days, business was confined hen production was in handicraN staze. But today business people have to face ill be solved through statistical analysis. ct estimates, to limited units, w Qethroat competition and similarproblems. These problems w gurtjow if the losses were due fo under or overstocking, untimely purchases, inexa > Gnome prices, ete., a businessman analyses the problems with the help of statistics. Statistics unesereat extent helps business to make maximum profits. A trader estimates the demand of his products. He decides the quality and quantity of goods to be produced. All the activities of the business are concentrated and helped by statistics. If the estimates ‘of demand are correct, the businessman the chances of making profits; if overestimated, he makes good profits finds fington observes, un Therefore he predicts a good estimate for the future. Tn the words of Ya-Lum-Chou, “In business, statistics has already made radical changes in roving output quality, in selecting and promoting personnel, in efficient use of long-term capital requirements and forecasting sales, in estimating consumers” ‘other phases of business research and management. It is not an exaggeration decision in business is made with the aid of statistical data and statistical maintaining and imp! materials, in projecting ces, and in various tosay that fo day nearly every methods.” “A promoter is greatly helped with statistics. By analysing the situations through collected statistics, the promoter decides the location of business, financial resources, marketing of the products, availability “Statistics is like clay of labourers, etc. For all these activities statistics is the guide. King says Sfwhich you can make a God or Devil as you please.” Ya-Lin-Chou says, “Statistics is a method Gfaecision-making in the face of uncertainty on the basis of numerical data and calculated risks. ” Therefore careful study of statistical data and their analysis will open the doors of success in business. Statistics in Astronomy Astronomers were the first who. made recordings ofthe movements of heavenly bodies and studied fatistics. The astronomers relied on estimation the eclipse.and astronomical issues on the basis of ste jin ‘many cases and later on the estimation was corrected into a precise idea with the help of statistics. Statistics in Education Statistics is widely used in education. Research has became a common feature in all branches of activities, Statistics is necessary for the formulation of policies to start new courses, consideration es available for new courses, etc. There are crores of people engaged in research work of facili to1est the past knowledge and evolve new knowledge; and these are possible only through statistics. Statistics in Accounting and Auditing To day the science of statistics touches every subject. As such, a paper on statistics has been made compulsory in the C.A. and I.C.W.A. Examinations, In accounting, exactness is a must, For decision-making purposes, so much precision is not essential; but decision may be taken on the basis of approximation. The current assets are generallyStatistics Theory ang p Tay values of current assets is mag 14 The correction of nt valucs. i . jae e yalued on the ‘ofnoney or the current value of it (charging depreciation); the o purchasi Be ‘ current value, through the use of price indices, which are base” in keeping wit . ti dy of correlation analysis between profits and dividends wy 7 tion of staus! ics. A S 18. 5 collec na of future profi sly followed. Voluminows transactions cy ty ne to know the INT fechniques are commor ) mpting ake limitation of finance, staff, etc. An auditor may look into ane ill also conduct pilot audit to find the new rate of error. On the b, He books to be audited. : audited or examin , ines the sample size of the year’ ferror in thepastycars. © earth the auditor deter statistics in Research Statistical methods and statistica able in research work. For instance, expe, e , i types of fertilisers and on different types of soil ete. are 5, spoaterop ils emp on ify of increasing the yield. In the field of medicine anq mane erstcal methods are used (0 know the effectiveness of new discovered med. aun Freanneat Market researches extensively depend upon statistical methods in dr, Cone of trea with confidence tha theres hardly a research finding without sta 1 data are indispens' Statistics in Planning te ‘Whenever we think of a plan, we have to think of statistics. Modern age is an age of. Today efficient planning is @ must for almost all countries, particularly the developing econo: for their economic development and in order that planning 1 successful, it must be based ona co- and sound analysis of ‘complex statistical data. Various | plans that have been prepared for the econe: development: ‘of acountry have also made use of the statistical material available about-various ec problems. National Sample Survey was primarily started to collect statistical data for use in plan: in India. Not only plans ‘of economic development are constructed on the basis of statistic: but the success that a p! .d best by the use of. statistical apparatus. for making decisions concerning the day-to-day policy of acountry, an accurate statistical knov of the age and sex-wise composition of the population is imperative for the government. Prepars of detailed plans without the assistance of statistics is just unthinkable. Statistics In Mathematics Statistics may be considered to be an important member of the mathematics family. In the words ae ‘Statistics is abranch of applied mathematics which specialises in data”. Statistics is intima': to an ee dependent upon mathematics. The interaction of Mathematics and Statis! oe ee century with the:development of the Theory of ‘Probability, the eee ee canes : Hi rhivnaniagane of England, France and Germany. The import? char fctnedt eae ts can fre quantitatively expressed. And where quantities are involv see ace emai entree ole Satine ae extensive help indertaken, ions for giving practical shape to various types of stu Statistics inevitably indi A | ly indicates a itati i" imerpolation, extra-polation, correlatio quantitative study of many facts such as — Avera make these studies, th Correlation, regression, analysis of ti ies, i C gone toveietul s, the application of mathematics i of time series, index numbers etc relationship between mathematic ics is unavoidable. Thus, we find that there is Statistics and the Commonman ra Itis important to note that human se lan achieves is also measure 1 ciaImporienenr > .ds are so closel Jained by statistical methods. Stati g 11 types of persons. When we wish to purchase a Car, Scooter, Washing Mac ‘ch or anything, We go through the price lists of various companies and their makers decision. jications of statisties are so numerous that it is often remarked “Statistics is what isticians do”. Goverment, busi amen, individuals etc, collect statistical data required to ar state otvities efficiently and effectively. It is instrumental in enhancing human welfare and is ut tel aster-key that enables to solve the problems of mankind almost in every field. Most of suc remake use of statistics consciously or unconsciously in taking decisions, Statistical knowledge the peePessential for a good citizen. HG Wells was right when he said “Statistical chinking will isin ip be as necessary for efficient citizenship as the ability to read and write”. ore statistics greatly assists common-man in making clear judgement in their investment plans an securities, which are safe and which have the best prospects of yielding good returns. On the oof statistical information, one may determine whether to buy securities or to sell or to do nether. It may be remembered that statistics neither proves anything nor disproves anything. Statistics is only a tool. If properly used, these tools can do wonders and, if misused, can be disastrous. That of statistics used properly, they help in taking wise decisions and, if misused, they can do more rerm than good. If statistics and its tools are misused, the fault does not lie with the science of statistics. Rather, it is the people, who misuse it, are to be blamed. Functions Of Statistics Statistics has universal applicability. All activities are connected with statistical data. Burgess, summed up the functions of statistics in the following words: “The fundamental gospel of statistics is to push back the domain of ignorance; rute of thump, arbitrary or premature decisions, tradition and dogmatism and to increase the domain in which decisions are made and principles are formulated on the basis of analytical quantitative facts.” The functions of statistics are as follows: 1 The important function of statistics is to collect the facts and figures in a systemmatic manner and to present them in such a form that they are easier to understand. Human mind cannot understand a large number of facts and figures at one 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 cari be converted into a picture, a diagram, etc., which are easier to undertand. For instance, we cannot remember the individual marks scored by 60 students; but it is easy to remember the average marks of the students in a single figure, say 65%. WL. King observes, “Jt is for the purpose of simplifying these unwieldy masses of facts that statistical science is useful. It reduces them to numerical totals and averages which.may be abstractly handled like any other mere numbers. It draws pictures and diagrams to illustrate general tendencies and thus ih many ways adapts these groups of ideas to the capacity of our intellects.” Statistics presents facts in a precise and definite form and thus help proper comprehension of what is stated. 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. For instance, the production of paddy is expected to increase from 5,000 tons in 2005 to 6,000 tons in 2006. It gives a definite ly with human actions and behaviour that practically all human activities can ical methods are common ways of thinking and they are metho« chine, be ex?! used by 4 Fridge, Wat to arrive at a The applStatistics Theory ang jai ir t jon of India is growing a “The population of I ‘ ave if lee statement oe ion of India is growing at the rate Yh tian, For ea, The population ore information. statement, : ic . istics. But the meaning, " sage esas, eves & defini ain functions of statisti, ities: because, ison is one of the mi ai statistics: Compari to time and location. It also helps us tg com" the data with respect says, "The objet of statistics st engye in ST hth other. tiie le ih alee to escort cont renomend and he presen ess " fo be made benveen edt place and the effect ofsuch changes tn he ig for changes, which hav Jative figures rather than absolute figure, By Pats ‘are greatly interested in rel wee of a series of figures, when compared with othe, easily appreciate the significan sof comparisons are ratios, averages, wae Oe a ae oe inindia sod at 36,128 2004 as against 25 os Fc Stasis enlarges human knowledge andy, istics, indeed, is 10 enlarge 2 c er function of statistics, in his to Be ing, arenes ee i sae from a condensed form of statistics, conser Be oak ata es of living in India has increased. To knovr ih mass. For Ti le, he of living, we must have a clear idea about the rise in pricy - a difeenti mone ups; etc. Statistics enables one to understand clear ideas, In Ste si nee cen become clear and definite. It is a master key in <5 study, vague and indefinite ideas Scoble ofa fe enables petsons-to understand and measure the action, ofp. P . Statistical methods are helpful to de new theories. It is also helpful in formulating and testing hypothesis, For instance, ;, 5. 6 Statistics helps in testing the laws of physical scic: and social scie een Lats before its being accepted, is mere hypothesis, Hypoth becomes a law, because its truthfulness is tested and made acceptable through stati: Proofs. The Correctness of laws of different categories can only be tested with the Of statistical technig 7 lforeses aire conan ture trends ‘on th is e . Slatistics helps in -oefNic ke . Z cient of correlati Which we tion, Coefficient of, Production at “» Are the measures throu! SUPPIy relationship, price « » ele., can, easily be studied wi an ship, ee Statistics has beer alistcs is essen es has been temo; og ential for the prop administrate ore comes pe lence of kine Mt provides pieces16 Statistics Theory ang p, 6 2c information. Foresample, the statement “The population of Indias Browingata very ,, “lf is not statistics, But the statement, “The population ‘of India is growing at the rate of so, fas is nots s hp) statistics: because, it conveys a definite meaning. ‘i ‘¢ main functions of statistic. Stag Sct facitate comparison Comparison is one of th te = 8 Keeomparing the data with respect £0 time and location, It also helps Us to compe The object of statistics ts to enable, © any phenomenon with the other, Boddington says, coe =F ith a view to ascertaining the Pari o jo be made benween the past and the present results, W for ahanges, which have taken place and the effect of such changes In the future, pm solute figure. By comparison gy ‘are greatly interested in relative figures rather than al Y a ‘a series of figures, when compared with other g_ ° casily appreciate the significance of c of the same kind. The various means of comparisons are ratios, averages, rates, coef ty cic, For instance, the literacy rate in India stood at 36.17 in 2004 as against 29.45 jp, ant Statistics enlarges human knowledge and exper, 4 According to Bowley, “The proper function of statistics, indeed, Is to enlarge indivig experience. ” One can easily grasp ideas from a condensed form of statistics, converte g mass. For example, say that the cost of living in India has increased. To know the exten, the increase in the cost of living, we must have a clear idea about the rise in Price, whi affects different income groups; etc. Statistics enables one to understand clear ideas. In stat Study, vague and indefinite ideas become clear and definite. It is a master key to sole problems of human life, It enables persons to understand and measure the actions of pep .: Statistical methods are helpful to deve new theories. [tis also helpful in formulating and testing hypothesis. For instance, we cx verify the law of supply with the help of statistics. Like that, the success or failure of ney theories can be known easily with the help of statistical data. For example, statistics help, tus to measure the effects ofa rise in interest rate on savings and investment. It provides guidance in the formulation of new policies and theories at all stages and the drawing of plans ina fields. It enables to measure the results on the implementation of plans and theories and give suggestions from time to time. 5 Statistics helps in testing the laws of physical sciences and social sciences, A law, before its being accepted, is a mere hypothesis. Hypothesis becomes a law, because its truthfulness is tested and made acceptable through statistical proofs. The correctness of laws of different categories can only be tested with the kelp of statistical techniques. 1. man erent (future events) Statistical methods are very helpful in forecasting ure trends on the basis of the analysis of past data, as modified in the light of current condi Statistical methods help in the formulation of future policies by analysing past and preset conditions and making projections for future. 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. gee extent of relationships between different data can be measure efficient of correlation, coefficient of association, regression, etc., are the measures through which we measure the functional relationship, Demand and supply relationship, price at production relationship, income and consumption relationship, etc., can, easily be studied wl! the help of statistics. ; science of kins! 9. eT: Statistics has been termed in the beginning as the f tatistics is essential for the proper administration of a country. It provides pieces % 6.Importance; Functions, Limitations ‘i a7 information needed for the effic Be metncaciaro ea a Sean ee ee government uses statistics to have an understanding before impl alta altel techniques is so wide that almost all ministries and departments have sepa oe ont Thus there is a great need of statistics in the affairs of the ener erie Limitations of Statistics = Asa developing scienes, statistics and its technique are widely used in every branch of ki Statistics is not a magical device, which gives solutions to problems Benes aa nowledge hand poor people are making use of statistics in ther day to daylife. But it has its ov eee Wl. King rightly says, “Science of statistics is the most usefidl servant, but only of ea ot to those who understand its proper use.” The scope of statistics is very wide rand had great utility; but these are restricted by its limitations. Following are the important limitations of statistics: 1 Sass ds a del with india ems Sts deals with s ul with i groups or aggregates only. The scope of statistics lies outside the study of individual fact. The per copia income is obtained by dividing the total income by the total population. The per capita income does not reveal the poverty of individuals. King states, “Statistics from the very nature of the subject cannot and never will be able to take into account individual cases.” Statistics proves inade dividual cases. Thus it fails to reveal the true position. 2. cs - Statistics is numerical statement of facts. Statistics ‘deals with only the quantitative data. For example, per capita income, population growth, etc. Gan be studied by statistics; but qualitative aspects such as honesty, intelligence, poverty, efficiency, blindness, deafness, etc., cannot be studied directly. It may be possible if they are converted into numerical facts. According to Prof, Horace Secrits, “Some phenomenon cannot be quantitatively measured; honesty, resourcefulness, integrity, goodwill, all important in industry as well as in life, are generally not susceptible to direct statistical measurement.” If we convert the qualitative data into quantitative data, comparison is possible. For example, the intellige be measured by his rank or marks scored. If figures are given without details, we may arrive at wrong ‘and misleading conclusions. For example, two businessmen X and Y have an average profit of Rs. 1,200 per month during three months. We can say that they are equally efficient, because they are making the same average profits. Their profits’ are as follows: x ¥ First month, Rs. 800 i Rs. 1,800 ‘Second month 1,000 1,000 Third month 1,800 800 3600/3 = 1,200 3,600/3 = 1,200 1,200 aig et that_X is more efficient than Y. Xs business From the abave, we can come to the conclusion that © Nn isprogressing, while ¥'’business is declining So without details we may come toa wrong conclusion. ences are perfect. But statistical 4 aws of physical sci ws are not ics or chemistry. - Statistical results are true only a sti life in India is 45. ation statistics say that the span of li on the average. For instance, populati ry io sea i is only the average t mean that all men die at the age of 45. It is only at d : a = based on the theory of probability. ‘According to W.I. King, fatistics largely deals ee ade up of individual items radically different from each id these may be mi Me athe means and not a solution to the problem. with averages anai ‘ Md, | implifies complicated day, "| seal the entire sto} . sree dt pe dat ay Be sted. Marshall sayy, Sg eg the data. the ae every of He" economist 10 hav aie nial e bricks, Accord ome \ or wie OT tatsical method s the only method for use 29 qu must not tee be considered the best attack for every problem,” Statisticg ol vn ’ should this we on to the problem : Me the AE solutio vd be uniform and homogencous: Comparison is ane of hi f data shon omit data, Uniform and homogencons data can be compara Sibi || of statistical d +1 10 wrong and misleading results, Un "1M eee will direc noorepararble a Fee mmisnseds Ws the most important limitation OF statstig, ¢ 2. Siar i Tile 10 MT hes a tool though imperfect, which is dangenyas cg ro Bowley, “Stratis ae ns uve and deficienci WI. King states, Vtatistics a oe of thase who: do not of which you cam mal isthe uschul servant, but i je-a goad tool to an expert, like re a God or Devil as you please. He remarks, “Science of lie lv of erat value fo those who understand its proper gg "ike a sharp knife which i8 8 good tool toa gardener i is likely’ y it. Statisticians must know the ° Dat ae ss avho is likely to be hurt by it. : tees ay aod tonto a NM ney can make use of it (0 get fruitful results and avoig a oe eading resulis. It Will be of great help only if itis utilized by an iin wrong and mis istrus tistics _fine ou = te ones a value of statistics and its application in all the fields of knowledge, the se T eutistcs has earned a bad name. The innocence of the figures has been highly exploited iy, eee y doubtful eyes. There are many damaging statements levy. .. Statistics has been looked at fi vy nd sesine satisics Some have stated, “Statistics are tissues of falsehood” and “Do not believe s Statistics hes been viewed with suspicious feeling. It is also called “Rainbow of lies.” “An oy of ruth vill produce tons of statistics.” “There are three kinds of lies” lies, damned lies and satis: “Statistics can prove nothing.” “Statistics are the lies-of the first order.” All these statements shox that some people do not have any belief on statistics. ' On the other hand, statements are heard of supporting statistic “I figures say’ so, it cannot be otherwise.” There is difference of opinion on the nature of statistics There is nothing wrong with the figures of statistics. Numerical data are precise and accurate. Stasis itself may be adequate and inaccurate or it may be deliberately manipulated by interested persons. Therein, the user of statistics may face difficult situations to rely on it. Moreover, King says, “One of the shortcoming of statistics is that they do not always bear on their face the label of their qualit 1 Statistics neither proves nor disproves anything. But it is a tool, Bowley says, “Statist ee 2 rool, necessary, though imperfect, which is dangerous in the hands of those Wi Galati. Saunas deficiencies.” Therefore there is nothing wrong with the science ibe a not be blamed, But the blame will be levelled on those who have miss Suatsies, one must have “eatzin ip can make God or Devil as you please." Before a look, then it can be accepred, eft attics is collected by trained persons, who havean ub epied. King points out that “Science of statistics is the most useful serans “Statistics can prove. anything aon ‘eto oferta ‘othose who understand ity proper use.” iste 2 ae age ise, i =. UF and limitations of its uses, but.not due to the science of statistic sia is only a tool, i.e, method of approach, Tools, if misused, will produ if properly used, will produce good result and #8 a good tool to a gardener; but it is a dange™ eoImportance, Functions, Limitations 49 . ‘A basic error in statistical reasoning is to jump to a conclusion or generalisation on the basis Ge too small a sample of one which is not typical to the whole population to which conclusions ; are applied. If there are inadequacies at the very source of data, even the best of the methods used jn analysis and presentation of results will not serve any usefull purpose, A good deal of window- dressing is possible in the presentation of results, A graph on a different scale may bear a different | Igok and will need a very Keen eye to detect the trick. Undesirable facts may be omitted and only the favourable ones may be included, Such suppression of vital information gives a false and misleading ‘agcount of the phenomenon, The distrust of statistics is because of the following reasons: 1, Deliberate twisting of facts 2. Quoting figures without their context 3, Inconsistent definitions v 4) Selection of non-representative statistical units 5. Failure to present complete data 6. Inappropriate comparison 7, Wrong inference drawn 8. Using misleading basis 9. Improperly classified data 10. Data collected by improper persons 11. Inaccurate measurement 12. Arithmetical errors 13. Fictitious precision 14, Fallacies because of overlooking the data 15. Fallacies due to misinterpretation 16. Lack of technical knowledge of statistics 17, Being biased opinion of the investigator. 18. Using unsuitable data, 19. Overlooking the limitations of statistics. 20. Suppression of unfavourable results. Fallacies In Statistics Why statistic is eriticised? People come to conclusions or easy interpretation on looking at a few instances. For example, very often we see business advertisements, where statistics is freely quoted, that in a test made over five years with 1,000 persons, it was found that 950 persons liked the soap X better than any other soap. We believe these figures and the judgement, But we must know who made those tests. What were the other soaps with which the soap X was compared? Who were the investigators in the enquiry? All these questions were left unanswered profitably. As such, people begin to doubt even true statistical investigations, because of the wrong reports they have seen. There are many ways in which statistics can be misused or criticised. For example, a parent appointed a teacher to coach his dull son in mathematics. In the first test in the class he failed: Then he appointed another teacher for his son. In the second test also he failed. So he appointed a third arent concluded that all the tuition teacher. In the third test also he failed. After all these tests the p teachers were useless, His son may be dull in mathematics for this, his teachers should not be criticised, Therefore, statistics can be misused in any way as to suit one’s own interest. Interpretation should be done only by an expert, For example, a biscuit company quotes that they charge a lower rate than the rates of other companies. The company may be charging lower price, when compared with other companies; and it may be due to poorer quality or bad packing,Statistics Theory ang p Tay cate tools likély to be misused, Hence the fault Les with yy. the Statistical science is like del snNith the science ofstatistis, Mill sys, "AS a ool, satstical method requires iney > 4 : igen, ‘and that the results secured through statistical analysis require intelligent interpretati 4 ave to ther ignorance oF intrest oF design, give # bad image of statistics, Where be rama, it does not mean that the grammar itself is bad. “Statistics only furnishes a too) hough imperfect, which i dangerous inthe hands of those who do not know its use and Hs ‘Statistics is a comprehensive science and is closely related to all sciences, It js «, for some subject, statistics provides idens of basic Importance; for some it provides m. by 1 Sztion Inone way or the ther, orn-both ways, satis has an impact on mos othe th, ve Rdge"Even on the most clemntary level its impossible tounderstand psychology, oa nces without Some general ideas of the meaning ofan. economics, finance or the physical scien seroxat relationship, of sampling, of how to read chart and tables". The ability to ung, seearejaate numerical data is abasic skill required for the citizens in a democracy. Stat, Gonsidered as a common kit for describing and analysing data of various sciences, Harper observes, “Increasingly, figures have become the basis of rational decisions, ana. are proving that these decisions based on figures give better results.” Statistics affects ever, snd touches life at many points. It is rather imposible to think of any sphere of human activi, Satistics does not creep in. Infact, the modern culture has become a statistical culture and thes, of statistics has acquired tremendous progress in the recent past so much so that an eleme- nowledze of statistical methods has become a part ofthe general education in the curicula o countries. With the help of statistical methods itis possible to understand the whole thing in Gime and in a better way. Further, in the words of W.I. King, “It is for the purpose of simpli, masses of facts that statistical science is useful. It reduces them to numerical 1» bstractly handled like any other mere numbers.” 20 fice, these unwieldy or averages which maybe al A Few Examples 1. Classification and tabulation of raw data facilitate easy analysis and interpretation. 2. Average is an attempt to find one single figure to describe the whole figures. 3, Variation measured the éxtent to which the items vary from central value. 4. Coefficient of variation is used for comparative study of the variability or consistence of: ‘or more series. 5. Correlation is an analysis of the covariation betweer ~ 6, Regression is the measure of the average relationship between two or more variables in ter — of the original units of the data. 7. Index numbers are to measure changes over time in magnitu measurement, 8. Cost of living index number is a barometer and is the basis for fixing dearness allowance 9, Different measures of time series are facilitated to forecast and to know seasonal trené 10, Sampling theory is a study of relationship between a population and sample drawn fron! and estimation of the population parameters, QUESTIONS in. two or more variables. ide which are not capable of dirs Objective Type Questions 1. Whether the following statements are true or false; 1: Ibis necessary that statistics must be numerically expressed. ‘2 Figures cannot be manipulated in statistics,Importance, Functions, Limitations 2 3. Statistical Methods help in simplifying unwieldy mass of data, 4, Figures would not lie but liars use figutes to lie. 5. Using statistical data, estimate for the future can be obtained. 6, Statistical information is expressed in descriptive form, 7. Statistics are formed by facts expressed in numerical figures. 8. Statistics does not study individuals. 9. Statistical methods are most dangerous tools in the hands of inexpert. 10. Statistics helps in getting an accurate answer for any economic problem. [Ans: True—l, 3, 4, 5, 7, 8, 9. False—2, 6, 10]. THEORETICAL QUESTIONS 1, “The proper function of statistics is to enlarge individual experience”, Comment. (B.Com. Bangalore) ions of statistics. (M.B.A Jodhpur) What are the causes of distrust of statistics? ‘ = aad (B.Com. Jodhpur) 4. “Science without statistics bears no fruit and statistics without science has no roots.” Explain the above statement showing the relationship of statistics with some other sciences. 4 (M.A. Jabalpur) 5. Clearly explain what you understand by statistics. Discuss its scope and limitations, - (B.Com. Madras) 6. What are the uses and limitations of statistics? Discuss the importance of statistics as an “aid to commerce”. (B.Com. Osmania) 7. Write a note on the importance of statistics to the businessman, the economist and the government. (B. Com. Osmania) 2. Explain with the help of suitable illustrations, the functi 3. Discuss the limitations of statistics. 8. Explain and illustrate the uses of statistics in commerce and business. (CA) 9. “Statistics cannot be used as a blind man uses a lamp-post for support instead of illumination.” ‘Comment on the above remark. (Agra B.Com.) 10. “The science of statistics is the most useful servant; but only of great value to those who understand its proper use”. — King. Comment 11, “Statistics is a body of methods for making wise decisions in the face of uncertainty. “Comment on the statement bringing out clearly how des statistics help in business decision-making. (MBA, Rohtak, B.Com. Andhra, Banaras, Nagpur, Bangalore) 12. “Statistics are numerical statements of facts but all facts numerically stated are not statistics.” Comment upon the statement and state briefly which numerical statements of facts are not statistics. (B.Com, Banaras, Andhra, Meerut) 13, Critically examine the following statements: (a).“Statistics can prove anything” (5) “Statistics can prove nothing” (©) “Figures. would not lie but liars use figures to lie”. 14. “Statistical methods are most dangerous tools in the hands of the inexperts”. Discuss and explain the limitations of statistics. (B.Com. MS) , 15. Comment on the following statements: (a) “Statistics is a science of counting”. (Bowley) (b) “Statistics is a science of estimates and probability”. (Boddington) (©) “Statistics may rightly be called averages”. (Bowley).