define statistics. discuss its functions and imitation with illustration?

Dear Student
Definition of Statistics:
  • In the Plural Sense: “Statistics are numerical statements of facts in any department of enquiry placed in relation to each other.
  • In The Singular Sense:"Statistics is the science of collection, presentation, analysis and interpretation of numerical data. 
  1. It provides a Quantitative expression of economic problems :Statistics is a quantitative expression of economic problems which tells us in what quantity to produce , this is based purely on facts and figures.
  2. Helps in making Inter sectoral and Inter temporal comparisons:  Intersectoral comparisons compares the changes taking place between different sectors of the ecnomy while inter temporal comparisons means understanding of changes taking place in the magnitude of the problem overtime.
  3. Helps to build cause and effect relationship: Statistics help to compare data which in turn helps to built out cause and effect relationship. Example : Change in prices of cars effects their demand negatively.
  4. Helps in the construction of economic theories: one of the most popular theory , ie, the theory of demand was built with the help of statistics only.
 (i)Study of Numerical Facts only: Statistics studies only such facts as can be expressed in numerical terms. It does not study qualitative phenomena like honesty, friendship, wisdom, health, patriotism, justice, etc.
(ii) Study of Aggregates only: Statistics studies only the aggregates of quantitative facts. It does not study any particular unit. For example, if the income of Ram is Rs 2000 per month, it has no relevance in statistics. But if the income of Ram is Rs 2000 p.m., that of Sohan is Rs 3000 p.m. and that of Shyam is Rs 4000 p.m. in the aggregate of Rs 9000 and average of Rs 3000, it makes sense in terms of relative income of Ram, Shyam and Sohan. Average income will lead to the conclusion that all the three persons belong to middle class. Such a conclusion would not have been possible from the study, of Ram's income alone.
(iii)Homogenity of data, an Essential Requirement: To compare data, it is essential that statistics are uniform in quality. Data of different qualities and kinds cannot be compared. For example, production of foodgrains cannot be compared with the production of cloth. It is because cloth is measured in metres and foodgrains in tonnes. However, it is possible to compare their value instead of the volume.
(iv) Results are True only on an Average: Most statistical findings are true only as averages. They express only the tendencies. Unlike the laws of physical science or chemistry, statistical observations are not absolutely true. They are not always valid under all conditions For instance, if it is said that per capita income in India is Rs 18,000 per annum, it does not mean that the income of each and every Indian is Rs 18,000 per annum. Some may have more and some may have less than Rs 18,000 per annum. It is true only on an average.
(v) Without Reference, Results may Prove to be Wrong: In order to understand the conclusions precisely, it is necessary that the circumstances and conditions under which these conclusions have been drawn are also studied, otherwise they may prove to be wrong. 

NOTE :  (ILLUSTRATIONS have been provided in the explanation part of the points.)


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