Page 13 - DECO504_STATISTICAL_METHODS_IN_ECONOMICS_ENGLISH

Unit 1: Definition of Statistics, Importance and Scope of Statistics and Its Limitations

purpose, the state needs statistics for carrying on these works. The state also needs data about Notes
the roads, transport and communication, financial affairs, internal and external trade etc.
• To conclude, statistical methods and techniques have been used in almost all the spheres.
Statistical methods are essential to understand the effect to determining the factors of economic
development in the past, what psychological and sociological factor need to be developed for
economic development and for the success of a plan.
• In any statistical inquiry the data obtained are heterogeneous in nature. Statistical methods
alone cannot bring in perfect uniformity. Generally results obtained need not be uniform and
hence will serve no purpose.
• Prof. A. L. Bowley has rightly remarked that Statistics is a science of average. It implies that
statistical results are true only on average. For example, if we say that per capita income in
India is Rs. 12,000 per annum, it does not mean that the per capita income of the members of the
Birla’s family and the income of the poor fellows who sleep in the slum area are equal. Therefore,
averages give only contradicting results.
1.5 Key-Words

1. Statistics : Statistics is the study of the collection, organization, analysis,
interpretation, and presentation of data. It deals with all aspects of this,
including the planning of data collection in terms of the design of surveys
and experiments.
2. Statistical method : A method of analyzing or representing statistical data; a procedure for
calculating a statistic.
1.6 Review Questions

1. Define statistics and explain its importance.
2. Examine the important definitions of statistics. Which in your opinion, is the best ?
3. Discuss the scope of the study of this science.
4. Explain the use of statistics for economic analyses and planning.
5. Discuss the limitations of statistics.
Answers: Self-Assessment

1. (i) Two, singular, plural (ii) Quantitative, qualitative
(iii) Data (iv) Descriptive and inductive statistics
(v) Statistical methods.

1.7 Further Readings

1. Elementary Statistical Methods; SP. Gupta, Sultan Chand & Sons,
New Delhi - 110002.
2. Statistical Methods — An Introductory Text; Jyoti Prasad Medhi, New Age
International Publishers, New Delhi - 110002.
3. Statistics; E. Narayanan Nadar, PHI Learning Private Limied, New Delhi - 110012.
4. Quantitative Methods—Theory and Applications; J.K. Sharma, Macmillan
Publishers India Ltd., New Delhi - 110002.

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