What is Statistics?
The word ‘statistics’ is defined by Croxton and Cowden as follows:- “The collection, presentation, analysis and interpretation of the
numerical data.”
This definition clearly points out four stages in a statistical
investigation, namely:
- Collection of data
- Presentation of data
- Analysis of data
- Interpretation of data
In addition to this, one more stage i.e. organization of data is suggested
What is Business Statistics?
It is the science of good decision making in the face
of uncertainty and is used in many disciplines such as financial
analysis, econometrics, auditing, production and operations including
services improvement, and marketing research..
Uses of Statistics
- To present the data in a concise and definite form : Statistics
helps in classifying and tabulating raw data for processing and
further tabulation for end users. - To make it easy to understand complex and large data : This is done
by presenting the data in the form of tables, graphs, diagrams etc.,
or by condensing the data with the help of means, dispersion etc. - For comparison: Tables, measures of means and dispersion can help in
comparing different sets of data.. - In forming policies: It helps in forming policies like a production
schedule, based on the relevant sales figures. It is used in
forecasting future demands. - Enlarging individual experiences: Complex problems can be well
understood by statistics, as the conclusions drawn by an individual
are more definite and precise than
mere statements on facts. - In measuring the magnitude of a phenomenon:- Statistics has made
itpossible to count the
population of a country, the industrial growth, the agricultural
growth, the educational level (of course in numbers)
Limitations of Statistics
- Statistics does not deal with individual measurements. Since
statistics deals with
aggregates of facts, it cannot be used to study the changes that
have taken place in individual cases. For example, the wages earned
by a single industry worker at any time, taken by itself is not a
statistical datum. But the wages of workers of that industry can be
used statistically. Similarly the marks obtained by Kamau of your
class or the height of Atieno (also of your class) are not the
subject matter of statistical study. But the average
marks or the average height of your class has statistical relevance. - Statistics cannot be used to study qualitative phenomenon like
morality, intelligence, beauty etc. as these cannot be quantified.
However, it may be possible to analyze such
problems statistically by expressing them numerically. For example
we may study the intelligence of boys on the basis of the marks
obtained by them in an examination. - Statistical results are true only on an average:- The conclusions
obtained statistically are not universal truths. They are true only
under certain conditions. This is because statistics as a science is
less exact as compared to the natural science. - Statistical data, being approximations, are mathematically
incorrect. Therefore, they can be used only if mathematical accuracy
is not needed. - Statistics, being dependent on figures, can be manipulated and
therefore can be used only when the authenticity of the figures has
been proved beyond doubt..
