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Quantitative Techniques – I

Notes Self Assessment

State whether the following statements are true or false:
4. It is very difficult to imagine a field of knowledge which can do without statistics
5. Statistics is being used by almost every branch of knowledge such as physics, chemistry,
biology, sociology, geography, economics, business, etc.
6. The importance of statistics has been summarized by L.A. Bowler as, “A knowledge of
statistics is like a knowledge of foreign language or of algebra.

7. The subject of statistics originated for helping the ancient rulers in the assessment of their
military and economic strength.
8. Statistics is a dispensable tool for a proper understanding of various economic problems.

9. The system of keeping the accounts of income and expenditure of a country is known as
domestic income accounting.
10. The modern era is an era of mass production in which size and number of firms have
decreased.

Task Conduct a debate on following statements and interpret them.
1. ”Statistics can prove anything.”
2. “Statistics can prove nothing.”

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Caution Statistics should not be used in the same way as a drunken man uses lamppost for
support rather than for illumination.
1.3 Scope of Statistics

Statistics is used to present the numerical facts in a form that is easily understandable by human
mind and to make comparisons, derive valid conclusions, etc., from these facts. R.W. Buges
describes the functions of statistics in these words, “The fundamental gospel of statistics is to
push back the domain of ignorance, prejudice, rule of thumb, 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 analysed quantitative facts.”

The following are the main functions of statistics:
1. Presents facts in numerical figures: The first function of statistics is to present a given
problem in terms of numerical figures. We know that the numerical presentation helps in
having a better understanding of the nature a of problem. Facts expressed in words are not
very useful because they are often vague and are likely to be understood differently by
different people. For example, the statement that a large proportion of total work force of
India is engaged in agriculture, is vague and uncertain. On the other hand, the statement
that 70% of the total work force is engaged in agriculture is more specific and easier to
grasp. Similarly, the statement that the annual rate of inflation in a country is 10% is more
convincing than the statement that prices are rising.

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