CHAPTER 1 ( INTRODUCTION TO

STATISTICS )

Economics
“ oikos :- house
“ nemein” :- management .
Economics household
management

Why Statistics is Included in

Economics Statistics is an essential part of
economics because it provides the tools and techniques to
quantify and analyze economic activities and behaviors.
The inclusion of statistics in economics can be understood
through various key aspects:

What is statistics ?
Statistics is the science of collecting, analyzing, and
interpreting quantitative data. It involves the quantification
of facts and findings, providing numerical information to
support decision-making.
Statitics as a numerical data Imp
Definition: In its plural sense, statistics
refers to information
presented in numerical form, such as
poverty statistics,
employment statistics, population
statistics, etc.
Examples: Examples of statistics include
data sets like unemployment rates,
average income levels, and population
growth rates.
Numerical information v/s statistics
Not all numerical information qualifies as statistics.
For instance, individual numerical facts without
aggregation or analysis do not constitute statistics.

Distinguish data from statistics

Example of Non-Statistics: "Ayesha has $500 left in her wallet at the end of
the month." This is simply a piece of numerical information and not a
statistic since it does not represent an aggregate or an average.
Example of Statistics: "The average amount left in an

individual's wallet at the end of the month is $500." This is a

statistic as it provides an aggregate measure that can be

analyzed.

DEFINITION OF STATISTICS IN PLURAL SENSE

By Bowley: Definition: Statistics are numerical statements
of facts.
Context: These facts pertain to any department of inquiry.
Relationship: The facts are placed in relation to each other
to
provide meaningful insights

Features of statistics in plural sense

1. Aggregate of Facts:
Description: Single or random numbers do
not constitute statistics, as no meaningful
conclusion can be drawn from them.
Significance: Statistics are the aggregates of
facts, providing a basis
for drawing conclusions and making
analyses. .
2. Numerically Expressed
Requirement: Statistics must be expressed
in terms of numbers.
Exclusion: Qualitative descriptions such as
small, big, poor, or rich do not qualify as
statistics.
3. Multiplicity of cause
Influence: Statistics are affected by multiple
factors.
Complexity: The presence of multiple
influencing factors ensures that the data
remain meaningful even if one factor is
removed.
4. Reasonably Accurate:
Precision: Statistics should be reasonably
accurate to be reliable.
Trustworthiness: Accuracy is essential for
making informed decisions based on
statistical data
5. Mutually Related and Comparable:
Interrelation: Statistical data must be
related and comparable.
Utility: This relationship and comparability
enhance the utility of the data for analysis
and interpretation
6. Pre-determined Objective:
Purpose: Statistics are collected with a
specific, predetermined purpose.
Objective: Any information collected without
an objective is merely numerical data and
not considered statistics.
Statistics as a singular sense

Definition: Statistics, in its singular sense,

refers to the science of statistical methods. It
encompasses the techniques and methodologies
used for handling quantitative data.
1. Collection:
Description: Systematic gathering of
quantitative data through various methods such
as surveys, experiments, and observations
2. Organization:
Description: Structuring and arranging data into
categories for better understanding and
analysis.
3. Presentation:

Description: Displaying data in a clear and

understandable format.
Methods: Using graphs, diagrams, and tables to
visually represent data.
4. Analysis:
Description: Examining data to identify patterns,
relationships, and trends.
Techniques: Calculating averages, percentages,
and performing statistical tests.
5. Interpretation:
Description: Drawing conclusions and making
inferences from the analyzed data.
Objective: Providing insights and supporting
decision-making processes
Statistical tools
1. Nature of Statistics:
Science: Involves systematic methods and
techniques for collecting, analyzing, and
interpreting data.
Art: Requires skill and judgment to apply
statistical methods effectively to real-world
problems.
2. subject matter of statistics :
Numerical Data: Studies data in a scientific
and systematic manner.
Application: Helps relate data to real-life
problems for analysis and decision-making.
Types of Statistical Methods:
a. Descriptive Statistics:
Definition: Methods used for the collection,
presentation, and analysis of data.
Scope: Includes data from each and every
element of the given population.
Purpose: Summarizes and describes the
features of a dataset, providing a clear view
of the data.
b. inferential statistics :
Definition: Methods used to draw
conclusions about a population based on a
sample.
Scope: Involves making inferences or
predictions about the entire population from
a representative sample.
Purpose: Helps generalize findings from a
sample to the larger population.
Note Of Universe In Statistics
 Definition: Refers to the aggregate of
all items or units related to any subject
of study.
  Purpose: Understanding the complete
set of data points for comprehensive
analysis.
LIMITATIONS OF STATISTICS
1. Study of Aggregate
Data:
Limitation: Statistics typically focuses on
aggregates or groups rather than individual
cases.
Implication: Insights are drawn from overall
patterns and may
overlook specific details or anomalies in
individual data points
2. Study of Numerical Data:
Limitation: Statistics requires data to be in
numerical form for
analysis.
Implication: Qualitative data that cannot be
quantified is not
addressed by statistical methods.
[Link] Study of Heterogeneous Data:
Limitation: Statistics may struggle with data that
is highly heterogeneous or varied.
Implication: Variability in data types or sources
can complicate analysis and interpretation

4. Potential for Misuse:

Limitation: Statistics can be misused or

manipulated to support biased interpretations.
Implication : Data can be presented in ways
that mislead or distort the true findings, as
statistical results are not always clear-cut.
5. Results are True Only as Averages:

Limitation: Statistical results often represent

averages or
general trends.
Implication: Such results may not fully capture
extremes or
specific cases within the data.

6. Requires Expertise:
 Limitation: Effective use of statistical methods
often requires specialized knowledge and skills.
Implication: Misapplication of statistical
techniques by nonexperts
can lead to incorrect conclusions.

Importance and functions of statistics

Important

1. Quantitative Expression of
Economic Problems: Provides
numerical data on issues like poverty and
unemployment for clear analysis
2. Inter-Sectoral and Inter-
Temporal Comparison: Description:
Allows for comparisons between different
sectors and across different years.
Sectoral Comparison: Compares data from
various sectors within the same period
Temporal Comparison: Compares data from
different years.
 3. Policy formation : Aids in creating data-
driven policies for better decision-making.
4. Establishing economic model:
Develops models like demand functions
and consumption functions to understand
economic behavior

Top 5 questions

Ques.1 Distinguish between quantitative

and qualitative data .

ANS .

Basis Qualitative Data Quantitative Data

Data relating to
Data relating to
qualities or attributes
quantities that can be
Meaning that cannot be
expressed in numerical
expressed in numerical
terms.
terms.
Non-numerical Numerical
Nature
(descriptive). (measurable).
 Cannot be measured or Can be measured or
Measurement
counted in numbers. counted in numbers.
Classified according to Classified according to
Classification attributes or numerical values or
characteristics. magnitudes.
Gender, religion, marital Age, height, weight,
Examples status, blood group, income, marks, number
occupation. of children.

QUE.2 STATE ANY 3 FUNCTIONS AND

LIMITATIONS OF STATISTIC .
ANS. FUNCTIONS :
Presents Facts in a Definite Form
Statistics presents numerical facts in a
systematic and precise manner.
Simplifies Complex Data
It condenses a large amount of data into a
simple and understandable form through tables,
graphs, averages, etc.
Helps in Decision-Making
Statistics provides a scientific basis for making
decisions in business, economics, government,
and other fields.
Limitations :
 Deals Only with Numerical Data
Statistics studies only quantitative data and
cannot analyze qualitative facts unless they are
expressed numerically.
 Cannot Study Individual Cases
Statistics deals with groups or aggregates, not
individual observations.
 Results Are Not Always Exact
Statistical conclusions are based on estimates
and averages, so they may not be accurate in
every situation.
[Link] statistics as a plural noun.
Ans: In the plural sense, statistics is defined as
the information in terms of numerical data or
numbers such as employment statistics,
statistics concerning public expenditure,
population statistics, etc.
[Link] is descriptive statistics?
Ans: Descriptive statistics refers to those
methods which are used for the collection,
presentation as well as analysis of [Link]
methods relate to such estimations as a
measurement of central tendencies,
measurement of dispersion, measurement of
correlation, etc.
[Link] are the stages of statistical study?
Ans: The stages of a statistical study are:
Collection of data
Organization of data
Presentation of data
Analysis of data

Interpretation of data