Chapter 2
Collection of Data
Purpose of Data Collection: To show evidence for reaching a sound and clear solution to a
problem.
Variables and Observations:
o Variable: Values that vary (e.g., food grains production in different years). Represented by
X, Y, or Z.
o Observation: Each value of a variable.
o Data: The values of variables from which information can be obtained; a tool for
understanding problems.
Sources of Data:
o Primary Data: Data collected by the researcher directly through an enquiry; first-hand
information. (e.g., surveying students about a filmstar's popularity).
o Secondary Data: Data collected and processed by some other agency, then used by another
researcher. Obtained from published sources (government reports, newspapers, books) or
other sources (websites). Saves time and cost.
Methods of Data Collection (Surveys): A survey is a method of gathering information from
individuals to describe characteristics.
o Instrument: Questionnaire/Interview Schedule.
Preparation Guidelines: Not too long, easy to understand, avoid ambiguous/difficult
words, questions arranged from general to specific, precise and clear, no double
negatives, no leading questions, no indicating alternatives.
Types of Questions:
Closed-ended (Structured): Two-way (yes/no) or multiple-choice questions.
Easy to use, score, and codify, but difficult to write and may restrict answers.
"Any Other" option can be provided.
Open-ended (Unstructured): Allow individualized responses but difficult to
interpret and score due to variations.
o Basic Ways of Collecting Data:
Personal Interviews: Face-to-face interaction.
Advantages: Highest response rate, allows all question types (esp. open-
ended), clarification of questions, supplementary info from reactions.
Disadvantages: Most expensive, time-taking, interviewer's presence may
inhibit respondents.
Mailing (Questionnaire) Surveys: Questionnaire sent by mail. Includes online
surveys/SMS surveys.
Advantages: Less expensive, access to remote areas, no interviewer influence,
allows thoughtful answers, maintains anonymity, best for sensitive questions.
Disadvantages: Less opportunity for clarification, low response rates
(incomplete/unreturned/lost questionnaires), cannot be used by illiterates, long
response time, cannot watch reactions.
Telephone Interviews: Investigator asks questions over the phone.
Advantages: Cheaper than personal interviews, quicker, allows clarification,
better for reluctant respondents.
Disadvantages: Limited access (not everyone has a phone), reactions cannot
be watched, possibility of influencing respondents.
Pilot Survey (Pre-testing): A try-out with a small group to identify shortcomings, assess suitability
of questions, clarity of instructions, enumerator performance, and cost/time involved in actual
survey.
Census and Sample Surveys
Census (Complete Enumeration): A survey including every element of the population.
o Example: Census of India (house-to-house enquiry covering all households), conducted every
ten years (last in 2011). Collects demographic data (birth/death rates, literacy, employment,
etc.).
o Can contain non-sampling errors.
Population (Universe): Totality of items under study; the group to which study results apply. All
individuals/items with certain characteristics.
Sample: A group or section of the population from which information is obtained.
o Representative Sample (Good Sample): Smaller than population, provides reasonably
accurate information at lower cost and shorter time. Allows more detailed information and
effective supervision of enumerators.
Types of Sampling:
o Random Sampling: Individual units from the population are selected at random, with every
individual having an equal chance of being selected.
Example: Lottery method (names on paper, mixed, selected one by one). Computer
programs also used.
Exit Polls: Random sample of voters asked whom they voted for to predict election
results.
o Non-Random Sampling: Units do not have an equal chance of being selected; investigator's
judgment, purpose, convenience, or quota plays a role. (e.g., selecting conveniently situated
households) .
Sampling and Non-Sampling Errors:
o Sampling Error: Difference between the sample estimate and the corresponding population
parameter (actual value). Can be reduced by taking a larger sample.
o Non-Sampling Errors: More serious than sampling errors as they are difficult to minimize
even with a large sample, and can occur in a Census.
Sampling Bias: Occurs when the sampling plan excludes some members of the target
population.
Non-Response Errors: Occurs if interviewer cannot contact a person or a person
refuses to respond, leading to non-representative sample observations.
Errors in Data Acquisition: Arise from recording incorrect responses (e.g.,
measurement differences due to instrument, investigator, or respondent).
Worksheet
Assertion-Reason Based Questions
Directions: In the following questions, a statement of Assertion (A) is followed by a statement of Reason
(R). Mark the correct choice as: (a) Both A and R are true and R is the correct explanation of A. (b) Both A
and R are true but R is not the correct explanation of A. (c) A is true but R is false. (d) A is false but R is
true.
1. Assertion (A): Scarcity is the fundamental economic problem.
Reason (R): Human wants are unlimited, but the resources to satisfy them are limited and have
alternative uses.
2. Assertion (A): An economist needs statistics to understand and explain economic problems.
Reason (R): Statistics deals with the collection, analysis, interpretation, and presentation of
numerical data, which are economic facts.
3. Assertion (A): Qualitative data can be measured numerically.
Reason (R): Gender distinguishing a person as man/woman is an example of qualitative data.
4. Assertion (A): Statistical methods are a complete substitute for common sense in decision-making.
Reason (R): The average depth of a river being less than the average height of a family guarantees
safe crossing for all members.
Fill in the Blanks
1. Economics is the study of how people and society choose to employ _________ resources that could
have alternative uses to produce various commodities that satisfy their wants and to distribute them
for consumption among various persons and groups in society.
2. When you buy goods to satisfy your own personal needs, you are called a ___________.
3. Activities undertaken for a monetary gain are called ___________.
4. Statistics helps in ___________ mass data into a few numerical measures like mean and variance.
5. Data collected by the researcher directly for the first time is called _________ data.
6. The most common instrument used in surveys is a _________ or interview schedule.
7. A survey that includes every element of the population is known as a _________.
8. The difference between the sample estimate and the corresponding population parameter is known as
a _________ error.
Multiple Choice Questions (MCQs)
1. Which of the following is NOT a conventional division of the study of Economics mentioned in the
text?
(a) Consumption (b) Production (c) Investment (d) Distribution
2. What does the study of Consumption focus on?
(a) How producers choose what and how to produce. (b) How national income is distributed. (c)
How consumers decide what to buy given their income and prices. (d) How economic problems are
mitigated.
3. Which of the following is an example of qualitative data according to the text?
(a) Income earned (b) Marks in a subject (c) Beauty (d) Production of rice in million tonnes
4. Scarcity gives rise to the problem of:
(a) Unlimited wants (b) Choice between different commodities (c) Abundance of resources (d) Fixed
prices
5. The purpose of collecting economic data is primarily to:
(a) Memorize facts (b) Understand and explain economic problems (c) Increase personal wealth (d)
Create new economic theories without empirical basis
6. Which of the following is an advantage of a Personal Interview?
(a) Least expensive (b) Most time-taking (c) Highest response rate (d) Maintains anonymity of
respondents
7. When the data has been collected and processed by some other agency, it is called:
(a) Primary Data (b) Secondary Data (c) Raw Data (d) Original Data
8. Which type of sampling gives every individual an equal chance of being selected?
(a) Non-random sampling (b) Quota sampling (c) Convenience sampling (d) Random sampling
9. A try-out with a small group of the questionnaire before the actual survey is known as a:
(a) Final Survey (b) Pilot Survey (c) Census Survey (d) Sample Survey
10. Which of the following non-sampling errors occurs if an interviewer is unable to contact a person
listed in the sample or a person refuses to respond?
(a) Sampling Bias (b) Non-Response Error (c) Errors in Data Acquisition (d) Measurement Error
Subjective Questions (3 Marks)
1. Explain the concept of "scarcity" in economics with an example from daily life.
2. Differentiate between a consumer and a producer, providing an example for each.
3. How does statistics help an economist in presenting economic facts?
4. Briefly describe the three conventional parts into which economics is often discussed.
5. What is the main purpose of collecting data in economics?
6. Distinguish between quantitative and qualitative data with an example for each.
7. List three points to keep in mind while preparing a questionnaire for a survey.
8. Define a 'variable' and an 'observation' in the context of statistics, using an example from the text.
Subjective Questions (4 Marks)
1. Discuss how the alternative uses of resources give rise to the problem of choice, using an example
from the text.
2. Explain the stages involved in the process of statistics as described in the chapter.
3. Why is knowledge of statistics considered indispensable for an economist? Provide two reasons.
4. Illustrate with an example why "Statistical methods are no substitute for common sense."
5. Differentiate between primary and secondary data, providing an advantage of using secondary data.
6. Discuss the advantages and disadvantages of using Personal Interviews as a mode of data collection.
7. Explain the concept of a 'Pilot Survey' and its benefits in data collection.
8. What is the difference between a Census and a Sample Survey? Why are sample surveys preferred in
statistics?
Subjective Questions (6 Marks)
1. "Economics is the study of how people and society choose to employ scarce resources that could
have alternative uses in order to produce various commodities that satisfy their wants and to
distribute them for consumption among various persons and groups in society." Elaborate on this
definition, linking it to the concepts of scarcity, choice, and economic activities.
2. How does statistics aid in the formulation and evaluation of economic policies? Provide examples to
support your answer.
3. Beyond its role in understanding economic problems, what are the other significant contributions of
statistics to the field of economics? Discuss at least three such contributions.
4. Compare and contrast the three basic ways of collecting data: Personal Interviews, Mailing Surveys,
and Telephone Interviews. Discuss their respective advantages and disadvantages.
5. Explain the concept of 'sampling error' and 'non-sampling errors.' Why are non-sampling errors
considered more serious? Provide examples for different types of non-sampling errors.