DEFINITIONS, SCOPE AND LIMITATIONS

Introduction:
In the modern world of computers and information technology, the importance of statistics is very
well recognised by all the disciplines. Statistics has originated as a science of statehood and found
applications slowly and steadily in Agriculture, Economics, Commerce, Biology, Medicine,
Industry, planning, education and so on. As on date there is no other human walk of life, where
statistics cannot be applied.

Origin and Growth of Statistics:

The word ‘ Statistics’ and ‘ Statistical’ are all derived from the Latin word Status, means a political
state. The theory of statistics as a distinct branch of scientific method is of comparatively recent
growth. Research particularly into the mathematical theory of statistics is rapidly proceeding and
fresh discoveries are being made all over the world.

Meaning of Statistics:
Statistics is concerned with scientific methods for collecting, organising, summarising, presenting
and analysing data as well as deriving valid conclusions and making reasonable decisions on the
basis of this analysis. Statistics is concerned with the systematic collection of numerical data and
its interpretation.
The word ‘ statistic’ is used to refer to
1. Numerical facts, such as the number of people living in particular area.
2. The study of ways of collecting, analysing and interpreting the facts.

Definitions:
Statistics is defined differently by different authors over a period of time. In the olden days statistics
was confined to only state affairs but in modern days it embraces almost every sphere of2 human
activity. Therefore, a number of old definitions, which was confined to narrow field of enquiry were
replaced by more definitions, which are much more comprehensive and exhaustive. Secondly,
statistics has been defined in two different ways – Statistical data and statistical methods.
The following are some of the definitions of statistics as numerical data.
1. Statistics are the classified facts representing the conditions of people in a state. In particular
they are the facts, which can be stated in numbers or in tables of numbers or in any tabular or
classified arrangement.
2. Statistics are measurements, enumerations or estimates of natural phenomenon usually
systematically arranged, analysed and presented as to exhibit important inter relationships among
them.

Definitions by A.L. Bowley:

Statistics are numerical statement of facts in any department of enquiry placed in relation to each
other. - A.L.
Bowley
Statistics may be called the science of counting in one of the departments due to Bowley, obviously
this is an incomplete definition as it takes into account only the aspect of collection and ignores
other aspects such as analysis, presentation and interpretation.
Bowley gives another definition for statistics, which states ‘ statistics may be rightly called the
scheme of averages’ .
This definition is also incomplete, as averages play an important role in understanding and
comparing data and statistics provide more measures.

Definition by Croxton and Cowden:

 Statistics may be defined as the science of collection, presentation analysis and interpretation of
numerical data from the logical analysis. It is clear that the definition of statistics by Croxton and
Cowden is the most scientific and realistic one.
According to this definition there are four stages:
1. Collection of Data: It is the first step and this is the foundation upon which the entire data set.
Careful planning is essential before collecting the data. There are different methods of collection
of3 data such as census, sampling, primary, secondary, etc., and the investigator should make use
of correct method.
2. Presentation of data: The mass data collected should be presented in a suitable, concise form
for further analysis. The collected data may be presented in the form of tabular or diagrammatic or
graphic form.
3. Analysis of data: The data presented should be carefully analysed for making inference from
the presented data such as measures of central tendencies, dispersion, correlation, regression etc.,
4. Interpretation of data: The final step is drawing conclusion from the data collected. A valid
conclusion must be drawn on the basis of analysis. A high degree of skill and experience is
necessary for the interpretation.

Scope of Statistics:

Statistics is not a mere device for collecting numerical data, but as a means of developing sound
techniques for their handling, analysing and drawing valid inferences from them. Statistics is
applied in every sphere of human activity – social as well as physical – like Biology, Commerce,
Education, Planning, Business Management, Information Technology, etc. It is almost impossible
to find a single department of human activity where statistics cannot be applied.
We now discuss briefly the applications of statistics in other disciplines:

1. Statistics and Industry: Statistics is widely used in many industries. In industries, control
charts are widely used to maintain a certain quality level. In production engineering, to find
whether the product is conforming to specifications or not, statistical tools, namely
inspection plans, control charts, etc., are of extreme importance. In inspection plans we
have to resort to some kind of sampling – a very important aspect of Statistics.
2. Statistics and Commerce: Statistics are lifeblood of successful commerce. Any
businessman cannot afford to either by under stocking or having overstock of his goods. In
the beginning he estimates the demand for his goods and then takes steps to adjust with his
output or purchases. Thus statistics is indispensable in business and commerce. As so many
multinational companies have invaded into our Indian economy, the size and volume of
business is increasing. On one side the stiff competition is increasing whereas on the other
side the tastes are changing and new fashions are emerging. In this6 connection, market
survey plays an important role to exhibit the present conditions and to forecast the likely
changes in future.
3. Statistics and Agriculture: Analysis of variance (ANOVA) is one of the statistical tools
developed by Professor R.A. Fisher, plays a prominent role in agriculture experiments. In
tests of significance based on small samples, it can be shown that statistics is adequate to
test the significant difference between two sample means. In analysis of variance, we are
concerned with the testing of equality of several population means. For an example, five
fertilizers are applied to five plots each of wheat and the yield of wheat on each of the plots
are given. In such a situation, we are interested in finding out whether the effect of these
fertilisers on the yield is significantly different or not. In other words, whether the samples
are drawn from the same normal population or not. The answer to this problem is provided
by the technique of ANOVA and it is used to test the homogeneity of several population
means.
4. Statistics and Economics: Statistical methods are useful in measuring numerical changes
in complex groups and interpreting collective phenomenon. Nowadays the uses of statistics
are abundantly made in any economic study. Both in economic theory and practice,
statistical methods play an important role. Alfred Marshall said, “ Statistics are the straw
only which I like every other economist have to make the bricks”. It may also be noted that
statistical data and techniques of statistical tools are immensely useful in solving many
economic problems such as wages, prices, production, distribution of income and wealth
and so on. Statistical tools like Index numbers, time series Analysis, Estimation theory,
Testing Statistical Hypothesis are extensively used in economics
5. Statistics and Education: Statistics is widely used in education. Research has become a
common feature in all branches of activities. Statistics is necessary for the formulation of
policies to start new course, consideration of facilities available for new courses etc. There
are7 many people engaged in research work to test the past knowledge and evolve new
knowledge. These are possible only through statistics.
6. Statistics and Planning: Statistics is indispensable in planning. In the modern world,
which can be termed as the “world of planning”, almost all the organisations in the
government are seeking the help of planning for efficient working, for the formulation of
policy decisions and execution of the same. In order to achieve the above goals, the
statistical data relating to production, consumption, demand, supply, prices, investments,
income expenditure etc and various advanced statistical techniques for processing,
analysing and interpreting such complex data are of importance. In India statistics play an
important role in planning, commissioning both at the central and state government levels.
7. Statistics and Medicine: In Medical sciences, statistical tools are widely used. In order to
test the efficiency of a new drug or medicine, t - test is used or to compare the efficiency of
two drugs or two medicines, t test for the two samples is used. More and more applications
of statistics are at present used in clinical investigation.
8. Statistics and Modern applications: Recent developments in the fields of computer
technology and information technology have enabled statistics to integrate their models and
thus make statistics a part of decision making procedures of many organisations. There are
so many software packages available for solving design of experiments, forecasting
simulation problems etc. SYSTAT, a software package offers mere scientific and technical
graphing options than any other desktop statistics package.
Limitations of statistics:
Statistics with all its wide application in every sphere of human activity has its own limitations.
Some of them are given below.
1. Statistics is not suitable to the study of qualitative phenomenon: Since statistics is basically
a science and deals with a set of numerical data, it is applicable to the study of only these
subjects of enquiry, which can be expressed in terms of quantitative measurements. As a matter
of fact, qualitative phenomenon like honesty, poverty, beauty, intelligence etc, cannot be
expressed numerically and any statistical analysis cannot be directly applied on these qualitative
phenomenons. Nevertheless, statistical techniques may be applied indirectly by first reducing
the qualitative expressions to accurate quantitative terms. For example, the intelligence of a
group of students can be studied on the basis of their marks in a particular examination.
2. Statistics does not study individuals: Statistics does not give any specific importance to the
individual items, in fact it deals with an aggregate of objects. Individual items, when they are
taken individually do not constitute any statistical data and do not serve any purpose for any
statistical enquiry.
3. Statistical laws are not exact: It is well known that mathematical and physical sciences are
exact. But statistical laws are not exact and statistical laws are only approximations. Statistical
conclusions are not universally true. They are true only on an average.
4. Statistics table may be misused: Statistics must be used only by experts; otherwise, statistical
methods are the most dangerous tools on the hands of the inexpert. The use of statistical tools
by the inexperienced and untraced persons might lead to wrong conclusions. Statistics can be
easily misused by quoting wrong figures of data. As King says9 aptly ‘ statistics are like clay
of which one can make a God or Devil as one pleases’ .
5. Statistics is only, one of the methods of studying a problem: Statistical method do not
provide complete solution of the problems because problems are to be studied taking the
background of the countries culture, philosophy or religion into consideration. Thus the
statistical study should be supplemented by other evidences.