Kerala Plus One Economics Notes Chapter 11 Introduction
Statistics
Statistics deals with the collection, classification analysis, and interpretation of numerical data. In our daily language, the word ‘Statistics’ is used in two distinct senses: singular and plural. In the plural sense, ‘statistics’ means ‘numerical facts systematically collected’ as described by the Oxford Dictionary. Thus, the simple meaning of statistics in the plural sense is data.
Functions of Statistics
- It simplifies the complexity of data: Complex numerical data are simplified through statistical methods.
- It reduces the bulk data: Huge data can be reduced to a few figures and thus, easily understandable.
- It adds precision in thinking: It actually sharpens one’s thinking faculty.
- It helps comparison of different sets of figures: e.g. import and export of two countries can be compared.
- It indicates trends and tendencies: Helps in making future plans.
- It helps in studying relationships between different factors: With the help of statistical methods, one can study the relation between two or more variables.
- It guides in the formulation of policies and helps in planning: Planning and policies of the government are based on statistical data.
Limitations of Statistics
The limitations of statistics are given below.
- Statistical laws are true only on average.
- Statistics can be misused.
- Statistics deals only with quantitative data.
- Statistical results lack mathematical accuracy.
- Statistical facts are collected for a pre-determined purpose.