Definition of Statistics

Origin and Definition of Statistics

 The term statistics is believed to have been derived from the Latin word "Statistic". In early days, it was used only of the collection of the information of the population of the state military. But in the modern time it is used in almost all aspects of human related activities.

Definition of Statistics

Statistics can be defined in two sense i.e. singular and plural. In singular sense it may be defined as the various methods and techniques for attaining and analyzing the numerical information. Different economists. According to Boddingtons Statistics is, " the science of estimates and probabilities". The techniques and method means the collection of data, organization, interpretation of numerical data. The above definition covers the following aspects of statistics.

1. Collection of data : The collection of data is the first step of statistical investigation. It must be collected very carefully. So, the data must be covered, if not the conclusion will not be reliable.

2. Organization :  The data may be obtained either from primary source or the secondary source. If the data is to be obtained from the primary source, then it needs organization. The data are organized by editing, classifying and tabulating them.

3. Presentation : After the collection and organization of data they are presented in systematic form such as table, diagram and graphical form.

 4. Analysis :  After the  collection, organization and presentation of data, the next step is to analyze the data we use average, correction, regression, times series etc. The statistics tools of analysis depend upon the nature of data.

5. Interpretation :  The last step of a statistical method is the interpretation of the  result obtained from the  analysis. Interpretation means to draw the valid conclusion.

Plural Sense

A plural sense, statistics means the aggregates of numerical facts collected systematically. The most popular and acceptable definition is given by Horace and Secrist. According to them, "Statistics means the aggregate of face affected to a market extent by multiplicity of course, numerically expressed, enumerated or estimated according to reasonable standard of accuracy collected in a systematic manner for pre-determined purpose and place in relation to each other." According to this definition statistics in plural sense should have following features:

1. Statistics are aggregate of facts: Single number or unrelated number can bot be statistic. The facts and figures should be related to each other. For e.g. the population of Nepal in 2058 is 23151423 not statistic. So to be a statistics there should be group of facts.

2.Affected by multiplicity of cause : The aggregate of facts and figures should be affected by a set of cause. For e.g. the unemployment rate of country has increased 5% are the last year due to the low economic growth, political instability civil markets.

3. Numerically express : All the statistics must be expressed in numerical form.

4. Enumerated or Estimated according to reasonable standard of accuracy : For investigation, statistical data can be collected either by enumeration or by estimation. If the data are collected by enumeration the result will be exact and accurate. But if the enumeration is not possible data will be estimated but 100% accuracy is not possible in this method.

5. They are collected for the pre-determined purpose : Before collecting the data objectives of enquiry should be clearly specified. The data collected without any pre-determined purpose may not be useful for enquiry.

6. Collected in a systematic Manner : Before collecting the data, well plan of data collection should be followed because haphazard collection of data may give error.

Importance and Limitation of statistics

Importance of Statistics

 The importance of statistics can be defined in different parts i.e. statistics in planning in economics, in business etc because statistical methods are used in every economic related areas.

1. Statistics in planning : Modern age is the age of planning every objective plan depends upon the  correct and sound statistical data. Planning is the pre-determined sets of program and policies, which is formulated in order to meet  the targeted objectives. To formulate the plan and details study of the existing situation is needed which is possible only thorough the statistical tools.

2. Statistics in Economics : Statistics is very essential to develop and prove the principles and laws of economics. It has grat importance to understand the economics problems like production, consumption, distribution etc. as thy can be solved by using statistical data.

3. Statistics in business : For the smooth operation of the business, statistical information is very useful. It simplifies the complex situation of business. It helps to study about the situation of market demand, supply, price etc. without a very careful study of market it is difficult to success in business. Therefor the statistics is very essential in business sector also.

Function of Statistics

The function of statistics can be defined on the following points :

1. Statistics simplify complexes.

2. Statistics express facts in definite form

3. It facilities comparison.

4. It helps in formulation policies

5. Statistics helps in forecasting

 Limitation of statistics

Statistics is extremely useful in economics field but  it has some limitations in itself which are as follow :

1. Statistics doesn't deal with the individual : Statistics deals with aggregate of facts not with individual. Individual fact or figure is out of its scope. For e.g. if we say Ram's height is 5 feet, is not statistics. For statistics we must say the height of Tam, Hari or any other folk is 5 ft.

2.Statistics doesn't study qualitative phenomenon : Statistics study only quantitative statement of fact, numerical numbers, such as income, production etc. It never study qualitative statement such as intelligence, beauty etc.

3. Statistical laws are not exact : Statistics gives result only on average. It is not 100% reliable. Therefor it is the law of average.

4. statistics is liable to be  misused : The greatest limitation of statistics is that, it must be used by exports only. If tit is used by unskilled or inexperienced person, the result may occur wrong.

5. Statistics in only means : Statistics is only the means, which provide a method of studying problem. But is should not be considered as the best because this method should be supplement by other techniques to derive conclusion.