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What role does statistics play in economic modelling?

Expert answers only!

**The importance of statistics in economic modelling is as follows**:

1.

**Helpful in calculating Per Capita Income(PCI)**:

Statistics helps us to calculate the Per Capita Income. PCI is the one of the component of National Income in economics. It is accounted by the help of National Income and the size of population. Thus, statistics helps us in calculating PCI.

2.

**Helpful in analysing consumer’s satisfaction**:

The statistical tools help the particular economy to analyze and make scientific and systematic report of consumer’s satisfaction. It helps in finding out the information about the consumer. So the degree of consumer’s satisfaction can be measured by the numerical evidence with the help of statistics.

3.

**Helpful in production functions**:

The relationship between the various factors of input and out put is termed as production function. In fact, such a production function is evaluated by the help of various statistical tools.

4.

**Helpful in income employment generation programme**:

It also helps in income employment generation programme through time series analysis and regression analysis which serves as the major tool of economics.

5.

**Helpful in formulating economic policies:**

The various statistical tools help in formulation of economic policies. In fact, the economic policies such as physical policies and monetary policies are determined by the help of statistics.

6.

**Helpful in analysing relationship between economic variables and economic development**:

Economic development means the growth of GNP along with the development of different aspects. Thus, statistics analyzes the relationship between economic variables and economic development.

Regards

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