1 What and Why eee Statistics— a Ld INTRODUCTION s to people. To some ‘statistics’ is an whereas to others it suggests tables, charts and figures, which j speeches, classroom lectures i . Te books, various reports, speeches, posing ly finds in newspapers, journals 0 e wai Sal "por example, we come across statements like, ‘There are 933 a Be | 008 at re average for 400 students there ae mne book written, printed and published it eet ery yent “The per capita net national product at current prices has increase’ from Rs. 15, ev ; increased from 174.8 m. oT: “The foodgrains production increase a 1997-0 oe? oT 32 m, tonnes i ihe Females per 1,000 males have gone tonnes - : in 2001"; Five Year Plan projects a 7.92 per cent vn from 946 in 1951 to 933 in 2001"; ooh rate of GDP”; “The population o! 84.4 crore in 1991 to 102.7 crore in 2001”. ; These statements contain figures and as such they are called numerical statements of facts. “They are highly convenient forms ‘of communication and are, at the same orm, auit cl ea, precise is i uitable policies. To most analysis of such statements can help in framing st and meaning oneal) rocess whether it be ji i tion about an activity or @ Pp) eople statistics generally refers to informat t v production. population, national is expressed in numbers. Numbers represent | income, etc. that i N i quantities and value of commodities produced and sold, prices of products, inventories, assets and liabilities, raw materials, customers, incol vnes and expenses. Records of births, deaths, number of passengers travelled during a year By toad, rail, ship and other modes from one place to snather, quantity and value of imports and exports 0 f different commodities to and from different countries, number of students in various courses in @ university, records of provident fund, leave, Costs and profit, industrial production, agricultural production, etc. also lead to numerical expressions. Whenever numbers are aliected and compiled, regardless of what they represent, they become statistics. In ‘other words, the term statistics is considered synonymous with figures or data*. In addition to meaning data, ‘statistics’ also rs ibject, just as ‘mathematics’ refers to-a subject as well as to symbols, formulae, and theorems ‘and ‘accounting’ refers to principles and methods as well as to accounts, balance sheets ‘and income statements. In this sense statistics is-a body of methods of obtaining and analysing data in order to base decisions on them. Tt is a -anch of scientific methods used in deal ing with phenomena that cam-be described numerically ither by counts or by measurements. Thus the word statistics refers either to quantitative nformation or to a method or dealing with quantitative information. In the first reference, it is ee a plural ae che statistics of births, deaths, imports, exports, etc.”; in the second nce, the used as a singular— ‘Statistics deals with the collection, presentation, analysis and interpretation of the quantitative information,” However, it is in the second sense (statistical methods) that the word statistics is used in this text except in a few places where the context makes it quite clear that the fe is intended, for example, in the phrase ‘statistical data’, e facts and figures sense ‘The word ‘statistics’ conveys variety of meaning: imposing form ‘of mathematics, ‘The 11th f India has increased from * Data are collection of any number of related observati 7 * + ions, We insaled ina given day by several workers or the number of tlepones fet aed dey Seed of several days by one worker and all the results our data. A coll alled per day over a perio and a single observation a data point. . A collection of data is called a data setSTATISTICS—WHAT AND WHY 13 ce “The methods by which statistical duta are analysed are called statistical methods, although the term is sometimes used more loosely to cover the subject ‘:tatistics’ as a whole. The math- ematical theory which is the basis of these methods is called the theory of statistics or math- ematical statistics, Statistical methods are applicable to a very large number of fields. Econom- ics, sociology, anthropology. business, agriculture, psychology, medicine, education—all lean heavily upon statistics, Numerous books have been written on business statistics, agricultural statistics, industrial statistics, medical statistics, education statistics, psychological statistics and other specific areas of application. It is true, of course, that these diversified fields demand some- what different and specialised technique in particular problems, yet the fundamental principles that underlie the various methods are identical regardless of the field of application. This will become evident to the reader if he realises that statistical methods in general are nothing but a refinement of everyday thinking. They are specially appropriate for handling data which are sub- jects to variations that cannot be fully controlled by experimental method and for which we can have only a fraction of the totality of observations which may exist. It should be noted at the very outset that statistics is usually not studied for its own sake; rather, it is widely employed as a tool— and a highly valuable one—in the analysis of problems in natural, physical and social sciences. In the latter area, statistics often assumes greater impor- tance in the study of economics and business. Statistical methods are used by governmental bod- ies, private business firms, and research agencies as an indispensable aid in (1) forecasting, (2) controlling, and (3) exploring. } Statistical methods range from the most elementary descriptive devices which may be under- f=. stood by the common man to those complicated mathematical procedures which can be appre- hended only by the expert theoreticians. The purpose of this text is to discuss the fundamental principles and techniques of Statistics in simple and easily comprehensible manner without go- ing into the highly mathematical aspects of the subject. 1.2. ORIGIN AND GROWTH OF STATISTICS It may be interesting to point out that statistics is not a new discipline but as old as the human society itself. It has been used right from the existence of life on earth, though its use was very much limited. In the good olden days statistics was regarded as the “Science of State- craft’ and was the by-product of the administrative activity of the State. It has bezn the tradi- tional function of the governments to keep records of population, births, deaths, taxes, crop yields and many other types of activities. Counting and measuring these events may generate many kinds of numerical data. . Though, in its present usage, the word “statistics” is barely a century old, it has been in use for a much-longer period. Censuses of population and wealth were taken even in the ancient times. According to a Greek historian, in 1400 B.C. a census of all the lands in Egypt was taken. Similar reports on the ancient Chinese, Greeks and Romans are also available, People and land were the earliest object of statistical enquiry. The word ‘statistics’ seems to have been derived from the Latin word ‘status’ or Italian word ‘statist’ or the German word ‘statistik’ each of which means a political State. It was first used by Professor Gottfried Achenwall in 1949 to refer to the subject-matter as a whole. Achenwall defined ‘statistics’ as “the political science of the several countries. “The word ‘statistics’ ap- peared for the first time in the famous book, “Elements of Universal Erudition” by Baron .F. Von Bielfeld, translated by W. Hooper M.D. (3 vols., London, 1770). One of its chapters is en- titled ‘Statistics’ and contains a definition of the subject as “the science that teaches us what is the political arrangement of all the modern States of the known world”. The science of statistics is said to have originated from two main sources: 1. Government Records, and 2. Mathematics. : 1. Government Records. This is the earliest foundation because all cultures with a recorded * Freund and Williams: Modern Business Statistics.4 STATISTICS—WHAT AND Wry history had recorded statistics, and the recording, as far as is known, was done by agents of the government for governmental purposes. Thus in ancient Egypt, the police beats Tegistration ists of all heads of families. In ancient Judea, a census of population was ron several oc. casions, including one in 2030 B.C, when the population was estimated at 3,800,000. The first Roman census was taken in 435 B.C, Statistics were recorded in Roman times also about mili- lary strength, taxable capacity of the people, births and deaths, etc. oad statistical data were collected for governmental purposes, statistics was then described as the ae of kings’ or “the science of statecraft’, Beginning with the sixteenth century, a large number of statistical hand-books were published. Many prominent people such as Captain John Graunt (1620- 1674), William Petty (1623-1678) and Henry contributed a great deal to the development of Statistics, William Petty was the author of Essays on Political Aritihmetick (1690). He regarded Statistics as political arithmetic, . 2. Mathematics. Statistics is said to be a branch of applied mathematics. The present body of statistical methods, particularly those concerned with drawing inferences about Population from a sample, is based on the mathematical theory of probability which marked a major step in the intellectual history of the world. The theory emerged in the seventeenth century as are- sult of gambling among the nobility of France and England. the gamblers of 17th century at- tracied the attention of such men as De Moivre, Fermet, Galileo and famous mathematicians like James Bernoulli, Daniel Bernoulli, Laplace and Gauss who discovered and developed the theory of probability while estimating the chances of winning or losing in gamble. The modern statistican, as the gambler in the past, is engaged in calculating risks associated with a particular decision or course of action. The actual outcome in any single trial is unknown, but the theory of probability indicates what will happen if a very large number of such trials are undertaken. The famous mathematician Abraham de Moivre (1667-1754) discovered the normal curve which forms an important part of modern statistical theory. Laplace (1749-1827) and Gauss (1777. 1855) independently arrived at the same results as De Moivre. The great mathematician Quetlet * (1796-1874) discovered the fundamental principle ‘the constancy of great numbers’ which is the basis of sampling. Much of the development in statistical techniques has taken place during the last century. Sir Francis Galton (1822-1911) developed the concept of regression, Karl Pearson (1857-1936) developed the Chi-square goodness of fit test, Sir Ronald Fisher (1890-1 962) made major contributions in the field of experimental designs. Galton, Pearson and Fisher all made significant advances because of which statistics has reached the present heights as a body of knowledge. They have been real giants in the development of the theory of statistics Growth of Statistics. Although statistics originated as a science fact, there is hardly any brarich of science today that ing are the two main factors which are res, time: |. Increased demand for Statistics. In the present century considerable development has taken Place in the field of business and commerce, governmental activities and science, Statistics helps in formulating suitable policies, and as such its need is increasingly felt in all these spheres. Taking the case of business, not only has the magnitude of business considerably increased but the growing size of business has made its Problems more complex. Most of these problems are resolved in the light of factual information and hence the need for statistics, there was a time when maintenance of law and order was considered to be the primary function of the gavernment and the policy of laissez-faire (Le, non-interference in economic matters) was supreme in the field of public policy. Today there is hardly any sphere in which the government has not entered. With the enlaryenvent of the func, tions of government the demand for statistics has also increased, Coming to the sciences, one finds tremendous advancement in the exi isting sciences and also development of many new branches of sciences. Extensive research work is now being under does not make use of statistics, The follow- ponsible for the development of Statistics in modernSTATISTICS—WHAT AND WHY Le taken by many more persons than was done a century ago. Since statistics is a tool of research, the demand for statistics has greatly increased, 2. Decreasing cost of Statistics. The time and cost of collecting data are very important lim- iting factors in the use of statistics, However, with the development of electronic machines, such as calculators, computers, etc,, the cost of analysing data has considerably gone down, This has led to the increasing use of statistics in solving various problems. Moreover, with the development of statistical theory the cost of collecting and processing data has gone down. For example, considerable advance has been made in the sampling tech- niques which enable us to know.the characteristics of the population by studying only a part of it, Since 1935, a branch of statistics known as design of experiments has made rapid progress and it is now possible to collect and analyse statistics more promptly and economically. Of great interest, even to the non-specialist in statistics, is the fact that much of the basic progress in statistical theory of the past few decades is attributed directly to a single individual, Sir Ronald Fisher (1890-1962). Although hundreds of scholars have contributed to the science of statistics, Fisher must be credited with at least half of the essential and important develop- ments in the theory as it now stands. The outstanding contribution of Fisher has put the subject of statistics on a very firm footing and carned for it the status of a full-fledged science. However, an impression should not be formed that the theory of statistics is complete and final. Inspite of the developments, the list of unsolved statistical problems is on and statistical research today is more vigorous than ever before. 1.3. STATISTICS DEFINED There have been many definitions of the term ‘Statistics’—indeed scholarly articles have care- fully collected together hundreds of definitions. Some have defined Statistics as statistical data (plural sense) whereas others as statistical methods (singular sense). A few definitions are ana- lytically examined below. Statistical Data Quantitative or numerical information may be found almost everywhere in business, economics and many other areas. It is probably more common to refer to data in quantitative form as sta- tistical data. But not all numerical data is statistical and hence it is necessary to examine a few definitions of statistics to understand the characteristics of statistical data. Webster defined statistics as “the classified facts representing the conditions of the people in a State, especially those facts which can be stated in numbers or in tables of numbers or in any tabular or classified arrangement.” The above definition is too narrow as it confines the scope of statistics to only such facts and figures which relate to the conditions of the people in a State. Yule and Kendall defined statistics as “By statistics we mean quantitative data affected to a marked extent by multiplicity of causes.” This definition is less comprehensive than the one given by Prof: fforace Secrist who de- fined statistics as follows: “By Statistics we mean aggregates of facts affected to a marked extent by multiplicity of causes, numerically expressed, enumerated or estimated according to reasonable standard of accuracy, collected in a systematic manner for a predetermined purpose and placed in relation to each other.” This definition clearly points out certain clfaracteristics which numerical data must possess in order that they may be called statistics. These are as follows: a I. Statistics are aggregates of facts. Single and isolated figures are not statistics for the simple reason that such figures are unrelated and cannot be compared. To illustrate, if it is stated that the income of Mr. ‘X’ is Rs. 90,000 per annum, this would not constitute statistics although it is a numerical statement of fact. Similarly, a single figure relating to production, sale, birth, em-16 STATISTICS—WHAT AND Way loyment, purcha: i etc,, cannot be regarded statistics although aggregates of such lee ‘would be stat rica eaeaiae of their comparability and relationship as parts of a commt: phenomenon, ; 2. Statistics are affected to a marked extent by multiplicity of causes. Generally Speaking facts and figures are affected to a considerable extent by a number of forces operating. together, For example, statistics of production of rice are affected by the rainfall, quality of soil, Seeds and manure, method of culuvation, etc. It is very difficult to study separately the effect Of each Of these forces on the production of rice. The same is true of Soe Prices, imports, ex. Ports, sales, profits, etc, In the experimental sciences like Physics an emistry it is Possible to isolate the effect of various forces on a particular event. Ways and means are also being de. vised in ‘Statistics’ for segregating the effect of various forces on an event. However, it has Proved to be a difficult task in statistical studies of phenomena which are influenced by a complex ya. riety of factors, many of which are not measurable. . 3. Statistics are numerically expressed. All statistics are numerical statements of facts,. ie, expressed in numbers. qualitative statements such as ‘The population of India is rapidly increas. ing’; or ‘The production of wheat is not sufficient’; or ‘India is a poor country’ do not consti- tute statistics. The reason is that such statements are vague and one cannot make out anything from them. On the other hand, the statement “The population of India has increased from 84.40 crore in 1991 to 102.7 crore in 2001” isa statistical statement. - 4. Statistics are enumerated or estimated according to reasonable standards of accuracy,,Facts and figures about any phenomenon can be derived in two ways, viz., by actual counting and measurement or by estimate. Estimates cannot be as precise and accurate as actual counts or measurements. For example, an estimate that 5 lakh people witnessed the Republic Day parade does not mean exactly 5 lakhs: it may be a few hundreds or thousands more or less. On the other hand, if we count the number of students in a class and say that there are 60 students, this figure would be 100% accurate.(In many cases, 100% accuracy of numbers may be difficult to attain. The degree of accuracy désired largely depends upon the nature and objects of the en- quiry. For example, in measuring distance between two places, say, Delhi and Bombay, even frac. tion of a kilometre can be ignored. Hence, in many statistical studies mathematical accuracy cannot be attained. However, it is important that reasonable standards of accuracy should be at- tained, otherwise number may be altogether misleading. . 5. Statistics are collected in systematic manner. Before collecting statistics a suitable plan of data collection should be prepared and the work carried out in a systematic manner. Data col- lected in a haphazard manner would very likely lead to fallacious conclusions, 6. Statistics are collected for a pre-determined purpose. The purpose of collecting data must be decided in advance. The purpose should be specific and well defined. A general statement of Purpose in not enough. For example, if the objective is to collect data on prices, it would not serve any useful purpose unless one knows whether he wants to collect data on wholesale or retail prices and what are the relevant commodities in view. 7. Statistics should be placed in relation to each other. If numerical facts are to be called statistics, they should’Be comparable. Statistical data are often compared period-wise or region- wise. For instance, the population of India at a particular point of time may be compared with that population of other countries, say U.S.A., U.K., China, etc. Valid comparisons can be made only if the data are homogeneous, ie, relate to the same phenomenon or subject and only likes are compared with likes. It would be meaningless of compare the height of elephants with the height of human beings. In the absence of the above characteristics, numerical data cannot be called statistics and hence “all statistics are numerical statements of facts but all numerical statements of facts are not sta- tistics. Statistical Methods The large volume of numerical information gives rise to the need for systematic methods whichSTATISTICS--WHAT AND WHY 7 cam be used to organixa, present, analyse und interpret the information effectively, Statistical methods are primarily developed to meet this need, But what aro statistical methods? The term statistics in this sense too has been defined differ- ently by difforent writers, A few definitions ure examined below: Prof, A:L, Bowley has given some definitions, At one place he says, “Statistics may he called the science of counting.” This definition is too narrow because it covers only one aspect of the science, namely, the collection of data, Other aspects like analysis, presentation, intrepretation, etc,, are completely ignored, At another place Bowley says, “Statistics may rightly he called the science of averages.” This definition also is not satisfactory because averages are only one of the devices used in statistical analysis. The other devices like dispersion, skewness, correlation, etc., are not at all covered by this definition. Still another definition given by the same author is “Statistics is the science of the measure- ments of social organism, regarded as a whole in all its manifestations .” This definition again is inadequate because it confines the application of statistics only to sociology, /.e., man and his activities. Bowley himself realised this when he remarked, ‘Statistics cannot be confined to any one science. X Boddington defines Statistics as “she science of estimates and probabilities” This definition is also incomplete because estimates and probabilities are only a part of statistical methods. Croxton and Cowden have given a very simple and concise definition of Statistics. In their View “Statistics may be defined as the collection, presentation, analysis and interpretation of numerical data.” The definition clearly points out four stages in a statistical investigation, namely: ® collection of data, (ii) presentation of data, (iii) analysis of data, and (iv) interpretation of lata. However, to the above stages one more stage may be added and that is the organization of data. Thus, Statistics may be defined as the science of collection, organization, presentation, analysis and interpretation of numerical data. According to the above definition, there are five stages in a statistical investigation: 1. Collection. Collection of data constitutes the first step in a statistical investigation. Utmost care must be exercised in collecting data because they form the foundation of statistical analy- sis. If data are faulty, the conclusions drawn can never be reliable. The data may be available from existing published or unpublished sources or else may be collected by the investigator him- self. The firsthand collection of data is one of the most difficult and important tasks faced by a statistician. Therefore, data have already been collected by others. This would save the investi- gator from foreseeable pitfalls, unnecessary labour and duplication of efforts. 2. Organization. Data collected from published sources are generally in organized form. How- ever, a large mass of figures that are collected from a survey frequently needs organization. The first step in organizing a group of data is editing. The collected data must be edited very care- fully so that the omissions, inconsistencies, irrelevant answers and wrong computations in the returns from a survey may be corrected or adjusted. After the data have been edited the next step is to classify them. The purpose of classification is to arrange the data according to some . common characteristics possessed by the items constituting the data. The last step in organiza- tion is tabulation. The purpose of tabulation is to arrange the data in columns and rows so that absolute clarity in the data can be presented. 3. Presentation. After the data have been collected and organized they are ready for presen- tation. Data presented in an orderly manner facilitate statistical analysis. There are two different modes in which the collected data may be presented: (i) Diagrams, and , (ii) Graphs. 4. Analysis. After collection, organization and presentation the next step is that of analysis, A major part of this text is devoted to the methods used in analysing the presented data mostly in18 STATISTICS—WHAT AND WHY ranging from si ‘tabular form, Methods used in analysing she presented data ve nanroeee ere ane observation of the data of complicated, sophisticated and Nighy nn ied such ever, in this text only the most commonly used methods of ation, repress, etc. ay measures of central tendency, measures of variation, drawing con- rl i i investigation is interpretation, 5. Interpretation, The last stage in statistical reinrpretalon of data is a difficult task and clusions from the data collected and analysed, The eval seealanaloced i i if the data that have beet lysed are not Ki high degree of skill and experience if th caer ater the whole object of the investigation may be defeated and fallacious con. clusion be drawn. Correct interpretation will lead to a valid conclusion of the study and thus can aid one in taking suitable decisions. | x Since statistical methods help in taking decisions, statistics may eed ree ae beady of methods for making wise decisions in the face of uncertainty: A m shea afdeaiaa is defi- nition is given by Prof. Ya-Lun-Chou in whose words, “Statistics A rake ¢ n-make ing in the face of uncertainty on the basis of numerical data and calculate _ This modern conception of the subject is a far cry from the ee oe ey myst In- deed even the pioneers in statistical research have adopted it only within the past two decades. 1.4, STATISTICS: SCIENCE OR ART Whether Statistics is a science or an art is often a subject of debate. Science refers to a systematised body of knowledge. It studies cause and effect relationship and attempts to make generalisation in the form of scientific principles or laws. Tt describes objectively and avoids vague judgements as good or bad. Science, in short, is like a lighthouse that gives light to the ships to find out their own way but does not indicate the direction in which they should go. Art, on the other hand, refers to the skill of handling facts so as to achieve a given objective. It is concerned with ways and means of presenting and handling data, making inferences logically and drawing relevant conclusions. While a century ago there were some misgivings among natural scientists as to whether sta- tistics had the right to be recognised as a distinct science, now almost all sciences are statisti- cal. What this suggests is that the design of scientific experiments and the evaluation of their result makes use of principles and practices growing out of the science of statistics. However, statistics as a science is not similar to exact sciences like Physics, Chemistry, Zoology, etc. This is because statistical phenomena are generally affected by multiplicity of causes which cannot always be measured accurately. In other words, the science of statistics by its v--y nature is less precise than the natural sciences. It is science only in a limited sense, viz., as a specialised branch of knowledge. More appropriately, statistics may be regarded as a scientific method because it is really a tool which can be used in scientific studies. Wallis and Robert have rightly remarked the “Statistics in not a body of substantive knowledge but a body of methods for obtaining knowl- edge”. If the science is knowledge, then art is action. Looking from this angle, Statistics may also be regarded as an art. In involves the application of given method to obtain facts, derive results; and finally to use them for appropriate action. 1.5. FUNCTIONS OF STATISTICS, The following are the important functions of the science of Statistics: 1. It presents facts in a definite form. 2. It simplifies mass of figures, 3. It facilitates comparison. 4. Ithelps in formulating and testing hypothesis. 5. It helps in prediction. 6, It helps in the formulation of suitable policies, * Wallis and Roberts : Statistics—A New Approach.J Fuveto 19 _k Definiteness. Numerical expressions are convincing and, therefore, one of the most important functions of statistics is to present general statements in a precise and definite form. Statements of facts conveyed in exact quantitative terms are always more convincing than vague utterances, Statistics presents facts in a precise and definite form and thus helps proper comprehension of what is stated. Consider, for example, a statement: “The production of wheat in India in 2010 is expected to be larger than that in 2009." The reader will not have a clear idea of the situation from the statement, He would surely like to know what 18 the extent of increase in wheat production the wrjter has in mind. On the other hand, if we quantify the statement as, “The production of wheat in India is expected to increase from 199.44 million tonnes in 1996-97 to 227.32 million tonnes in 2008-09", it conveys a definite information. Similarly, statements like “There is a lot of unemployment in India"; “The population of India is growing at a very fast rate” and “The prices of various commodities are rising”; etc. hardly convey any worthwhile information as they do not specify the numerical dimensions involved. 2, Condensation ‘Not only does statistics present facts in a definite form but it also helps in condensing mass of data into a few significant figures. In a way, statistical methods present a meaningful overall information from the mass of data, Thus it is impossible for one to form 2 precise idea about the income position of the people of India from a record of individual incomes Pf the entire population. However, figure of per capita income can be easily remembered by everyone. 3. Comparison. Unless figures are compared with the others of the same kind they are often devoid of any meaning, For example, the statement that the number of job seekers on the live register of Employment Exchanges was 12.33 million at the end of March 2009 conveys hardly any meaning unless the figure is compared with the last year figure. The statement would he much more meaningful if we say that the number of job seekers stood at 12.33 million at the end of March 2009 as against 10.81 million a year before, showing an increase of 14.1 per cent. By furnishing a suitable device for comparison of data statistics enables a better appreciation of the significance of a series of figures. 4. Formulating and Testing Hypothesis. Statistical formulation and testing hypothesis and to develop new theories. For example, hypothesis like whether a particular coin is fair or not, whether chloromycetin is effective in curing typhoid, whether the credit squeeze is effective in checking price increases, whether students have benefited from the extra coaching, etc., can be tested by appropriate statistical tools. 5. Prediction. Plans and policies of organisations are invariably formulated well in advance of the time of their implementation, A knowledge of future trends is very helpful in framing suitable policies and plans. Statistical methods provide helpful means of forecasting future events. For example, if Cement Corporation of India has to decide how much cement it should produce in 2010, it must know the ‘expected demand for the year. It may use subjective judgement and make a guess. However, a better ‘method would be to analyse the sales data of the past years or arrange a statistical survey of the market to obtain necessary data for estimating the sales volume of the next year. 6. Formulation of Pol STATISTICS—WHAT AND WHY | methods are extremely helpful in Jicies. Statistics provide the basic material for framing suitable policies. For example, it may be nebessary to decide how much crude oil India should import in 2010. he expected internal production and the likely demand for oil The decision would depend upon tl in 2010. In the absence of information regarding the estimated domestic output and demand for oil, the decision on imports cannot be made with reasonable accuracy. Robert W. Burgess has beautifully summed up the functions of Statistics as “The fundamental gospel of statistics is to push back the domain of ignorance, rule of thumb, arbitrary or premature decisions, tradition and dogmatism and to increase the domain in which decisions are made and principles are formulated on the basis of analysed quantitative facts.” 1.6. SCOPE OF STATISTICS The scope of statistics is so vast and ever-expanding that not onl: but also unwise to do so. Statistics pervades all subject-matter—its use has pe ly it is difficult to define it meated almost110 every facet of our lives. It is a tool o| judgement and has become a recognised discipline in | ‘erce, economics, biology. botany, astronomy, whether it be (rade, industry or comm JS STATISTICS—WHAT AND WHY f all sciences indispensable to research and intelligent its own right, There is hardly any field hysics, chem- istry, educutidTrmenttetne, Sociology, Ps} Chology, or meteorology where statistical tools are not APMichble, in Tact, the greatest victory o} ‘on the moon would not have been success in of statistics are so numerous that it is 0 ‘examine a few fields in which statistics Statisties and the State Since ancient tim suitable military and fiscal policies. Mo mankind of the 20th century that of landing of Apollo the absence of statistical help. The applications fen remarked “Statistics is what staristi¢ians do,” Let us is applied. 7 a the ruling kings and chiefs have relied heavily on statistics in framing st of the statistics such as that of crimes, military strength, population, taxes, ete., that were collected by them were a by-product of administrative activity In recent years the functions of the State have increased tremen fously. The concept of a State that of simply maint has changed ff “data and stati Welfare State. Statistical ining Taw and order to that o| ical methods arc of great hclp in promoting human welfare. Statistics today is not exclusively a by-prodict of administrative activity— the State collects statistics on several problems These statistics help in fram the Government whether they be Finance, Transport All Ministries and departments of c, Railways, Food, Commerce, Post ning suitable policies Def and Telegraph or agriculture, depend heavily on factual data for their efficient functioning, For “example, the Transport Department caniorsotve the problem of transport in Delhi unless it knows how many buses are operating at prese! nt, what is the total requirement and, therefore, how many additional buses be added to the existing flect. Not only during peace times, but during days of war also, statistics are indispensable, It fact it is impossible to fight a war successfully in the absence of factual data about enemy sirength. Statistics are so significant to te State that the government in most countries is the biggest collector and user of statistical data. Such data are of immense help to many institutions and research scholars, who further process it and arrive at useful conclusions which help in deci- sion-making. Statistics and Business With the growing size and ever-increasing competition the problems of the business enter- prises are becoming complex and they are using more and more statistics in decision-making, However, the employment of statistical methods in the solution of business problems belongs almost exclusively to the 20th century. In earlier days when business firms were small, owners atthe Tirms were directly engaged in almost all the areas of business activity. An owner of a small firm then might have acted as the stores manager, accountant, salesman, purchaser, ete. It was possible for him to make personal contacts with the customers and know exactly what they wanted from him. With the growth in the size of business firms it has often become impossible for the owners to maintain personal contact with the thousands and lakhs of customers. Man- agement has become a specialized job and a manager vise and control the operations of the d s called upon to plan, organize, super- business house. Since very little personal contact is pos- sible with customers these days, a modern business firm faces a much greater degree of uncer- tainty concerning future operations that it did when the size of business was small . Moreover, most of the production these days is in anticipation of demand and, therefore, unless 4 very careful study of the market is made, the firm may not be able to make profits, Thus, a businessman who has to deal in an atmosphere of uncertainty can no longer adopt the method of trial and error in taking decisions. If he is to be successful in his decision-making, he must be able to deat systematically with the uncertainty itself by careful evaluation and application of statistical methods, concerning the business activities. Business indeed runs on estimates and probabili- ties. The higher the degree attending on his busin: curacy of a businessman's estimates, the greater is the success in recent years it has become increasingly evident that statistics and Statistical methods have provided the businessman with onc if its most valuable tools for decision-making.STATISTICS—WHAT AND WHY ~~ iil Business activities can broadly be rouped unde awing heads: 1. Production, grouped under the following hea / 2, Sale, ( 3, Purchass, 4, Finance, §. Personnel, 9 : 6, Accounting, 7, Market and Product Research, and 8, Quality control, With the help of statistical methods in respect of each of the above areas abundant quantita- tive information can be obtained which can be of immense use in formulating suitable policies: | the information might be in the form of reports or computer printouts or it might simply consist \ of records that are kept in ledgers or other books, or in file folders in filing cabinet. The abilily of the manager to extract pertinent information from the data and use it in main decisions can have a significant effect on his or her own future as well as that of the organization. For cx~ i ample, sampling methods are used by marketing researchers in making surveys of consumer preferences over certain brands of competitive merchandise. Similarly, the technique of statisti- cal quality control helps in maintaining quality standards without inspecting each and every item. Statistical tables and charts are frequently used by sales managers to present numerical facts of sales. Similarly, in deciding what price of the commodities to fix, statistics are of great help. The techniques of time series analysis and business forecasting enable the businessman to predict with a fair degree of accuracy the effect of a large number of variables. Infact statistics is so highly useful to business that a prominent business executive and statistician said thirty year ago that “ When the history of modern times is finally written, we shall read it as beginning with the age of steam and then progressing through the age of electricity to that of statistics”. This may only be a paradoxical exaggeration on the part of an overenthusiastic statistician but the fact remains that consciously or-unconsciously a large part of modern business is being or- ganized around systems of statistical analysis and control. The scientific management movement of this century has especially emphasized the need for collecting facts and interpreting them carefully, as has its currently popular offspring ‘operations research’. However, it should be remembered that though statistical methods are extremely useful in taking decisions, they are not perfect substitute for commonsense,}A practitioner of business ‘statistics must, therefore, combine the knowledge of the business gnvironment in which he op- ‘erates and its technological characteristics with a heavy dose of commonsense and ability to in- terpret statistical methods of non-statisticians, Statistics and Economics In the year 1890 Prof Alfred Marshall, the renowned economist, observed that “Statistics are «the straw out of which I, like every other economist, have to make bricks”. This proves signifi- cance of statistics in economics. Economics is concerned with the production and distribution of wealth as well at with the complex institutional setup connected with the consumption, sav- ing and investment of income. Statistical data and statistical methods are of immense help in the proper understanding of the economic problems and in the formulation of economic poli- | cies, In fact, these are the tools and appliances of an economist’s laboratory. For example, what 10 produce, how to produce and forwiom to produce—these are the questions that need a lot of statistical data in the absence of which it is not possible to arrive at correct decisions. Statistics of production help in adjusting the supply to demand. Statistics of consumption enable us to find out the way in which people of different strata of society spend their income. Such statistics are very helpful in knowing the standard of living and taxable capacity of the peole. In the field of exéhange we study markets, laws of prices based on supply and demand, cost of production, banking an credit instruments, etc. What shall be the price of a particularJV 1nd STATISTICS—WHAT AND WHY commodity if its supply increases, or decreases? What price should a monopolist charge in or- der to reap the maximum profits?—these arc the questions which can best be answered with the help of statistics, In fact, statistics are the very foundation-stone of the theory of exchange. In distribution, too, statistics plays a-vilal_role. How the national income is to be calculated and ‘Now itix to be distributed, these are the questions which cannot be answered without statistics, In reducing disparities in the distribution of income and wealth statistics are of immense help. Similarly, in solving problems of rising prices, growing population, unemployment, poverty, ete, one has to rely heavily on statistics. In fact, most of the economic policies would be a leap in the dark in the absence of appropriate statistical information. Statistical methods help not only in formulating appropriate economic policies but also in evaluating their effect. For example, in order to check the ever-growing population, if emphasis has been placed on the family planning methods, one can ascertain statistically the efficacy of such methods in attaining the desired goal. Statistics plays such ar important role in the field of ‘economics that in 1926, Prof. R.A. Fisher complained of “the painful misapprehension that sta- tistics is a branch of economics. . - €! In recent years econometrics which comprises the application of statistical methods to the theoretical economic methods is widely used in economic research. Statistical methods of sam- pling are useful for collecting the basic data of economic studies. Statistical methodology also '\ indicates the reliability of the significance to be attached to them. The derivation of demand » function, the field in which the application of econometrics was first made, continues to be of major interest to economists. Similarly, the production functions, cost function and the consump- tion functions present many difficult problems in the analysis of which statistical tools are of immense use. i Thus, economists today are no longer content to theorize in abstract terms, citing statistics’ only as needed to support their arguments. Instead they utilize the excellent data now available to build a sound factual foundation for their reasoning. Gome of the uses of statistics in eco- nomics are as follows: 1, Measures of gross national product and input-output analysis have greatly advanced over- all economic knowledge and opened up entirely new ficlds of study. 2. Financial statistics are basic in the field of money and banking, short-term credit, con- sumer finance and public finance. 3. Statistical studies of business cycles, long-term growth and seasonal fluctuations serve to expand our knowledge of economic instability and to modify older theories, 4. Studies of competition, oligopoly and monopoly require statistical comparisons of market prices, cost and profits of inaividual firms. 5. Statistical surveys of prices are essential in studying the theories of prices, pricing policy and price trends, as well as their relationship to the general problem of inflation. 6. Operational studies of public utilities require both statistical and legal tools of analysis. 7. Analysis of population, land economics and economic geography are basically statistical in their approach. 8. In solving various economic problems such as poverty, unemployment, disparities in the distribution of income and wealth, statistical data and statistical methods play a vital role. Statistics and Physical Sciences ‘The physical sciences, especially astronomy, geology and physics, were among the fields in which statistical methods were first developed and applied, but until recently these sciences have not shared the 20th century developments of statistics to the same extent as the biological and social sciences. Currently, however, the physical sciences seem to be making increasing use of statistics, especially in astronomy, chemistry, engineering, geology, meteorology and certain branches of physics. |STATISTICS—WHAT AND WHY Y 1.13 Statistics and Natural Sciences Statistical techniques have proved to be extremely useful in the study of all natural sciences Like as y,-biology, medicine, meteorology, zoology, botany, etc, For example, in diugnos- ing the correct disease the doctor has to rely heavily on factual data like temperature of the body, pulse rate, blood pressure. Similarly, in judging the efficacy of a particular drug for curing a certain disease experiments have to be conducted and the success or failure would depend upon the number of people who are cured after using the drug. In botany—the study of plant life— one has to rely heavily on statistics in conducing experiments about the plants, effect of tem- perature, type of soil, etc. In fact it is difficult to find any scientific activity where statistic data and statistical methods are not used. Statistics and Research a Statistics is indispensable in research work. Most of the advancement in knowledge has taken place because of experiments conducted with the help of statistical methods. For example, ex- periments about crop yields and different types of fertilisers and different types of soils or the growth of animals under different diets and environment are frequently designed and analysed with the help of statistical methods. Statistical methods also affect research in medicine and public health. In fact, there is hardly any research work today that one can find complete without st tistical data and statistical methods. Also, it is impossible to understand the meaning and imp cations of most of the research findings in various disciplines of knowledge without having at least a speaking acquaintance with the subject of Statistics, Statistics and Other Uses, We have discussed above the significance of statistics in some important fields. Besides these, statistics are useful to bankers, insurance companies, social workers, labour unions, trade Ass ciations, chambers of commerce and to the politicians. For example, the politicians and their Supporters are immensely interested in knowing their prospects of winning an election. By sam- pling few voters prior to the election, the percentage of the votes the candidate will receive in the election can be worked out. This estimated percentage could be used to decide whether a greater campaign effort is required to ensure success. To take another exampie, the banks have to make a very careful sturdy of the cash requirements otherwise they may find they are short of cash and their existence is at stake. Similarly, the premium rates of the life insurance companies are based upon very careful study of the expectation of life. These references of statistical applications are not intended to be exhaustive, but they simply suggest the diversity or application of the underlying methods and ideas of statistics. fn fact, the applications of statistics are so numerous that statistics today has risen from the science of ‘raft to the science of universal applicability. It is instrumental in enhancing human welfare and is such a master-key that enables (0 solve the problems of mankind almost in every field. Most_. people make use of statistics consciously or unconsciously in taking decisions))Statistical knowl- edge is, in fact, essential for a good citizen. H. G. Wells very aptly pointed out that “Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write.” It must be remembered that the Statistical approach, though universal in its underlying ideas, . must be tailored to fit the peculiarities of each concrete problem to which it is applied. It is dan- gerous to apply statistics in cookbook style, using the same recipes over and over, without care- ‘ful study of the ingredients of each new problem.* Also the reader must understand that statistics is not a dry, abstract and unrealistic pursuit followed by a small group of highly trained mathematicians, but rather a vitally important part of the economic and business life of the community. The usefulness of statistics to the reader depends to a great extent on his ability to use his imagination in applying this tool to his own Particular situation. * Wallis and Roberts: Statistics—A New Approach, p. 12.Vad J STATISTICS—WHAT AND WHY ™ 1,7, LIMITATIONS OF STATISTICS Despite the usefulness of statistics in many fields, impression Se not be CH tistics are like magical devices which always provide the correct Se vii oot the data are properly collected and critically interpreted there is every poou.ol devine we ne conclusions. Therefore, it is also necessary to know the limitations i i ‘ se: statistics, The following are the important limitations of the science of statistics: ; 1, Statistics does not deal with individual measurements. Since statistics deals with agere- gates of facts, the study of individual measurements lies outside the scope isan Data are statistical when they relate to measurement of masses, not statistical when they relate to an indi- vidual item or event as a separate entity. For example, the wage earned by an individual worker at any one time taken by itself is not a statistical datum. But the wages of workers of a factory can be used statistically. Similarly, the marks obtained by one student of a class or his height are not the subject-matter of the study of statistics but the average marks the average height has statistical relevance. ; 2. Statistics deals only with quantitative characteristics. Statistics are numerical statements of facts. Such characteristics as cannot be expressed in numbers are incapable of statistical analy- sis. Thus, qualitative characteristics like honesty, efficiency, intelligence, blindness and deafness cannot be studied directly. However, it may be possible to analyse 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. 3. Statistical results are true only on an average. The conclusions obtained statistically are not universally true; they are true only under certain conditions. This is because statistics as a sciences is less exact as compared to natural sciences. 4, Statistics is only one of the methods of studying a problem. Statistical tools do not provide the best solution under all circumstance. Very often, it is necessary to consider a problem in the light of a country’s culture, religion and philosophy. Statistics cannot be of much help in study- ing such problems. Hence statistical conclusion should be supplemented by other evidences. 5. Statistics can be misused.* The greatest limitation of statistics is that it is liable to be mi: used. The misuse of statistics may arise because of several reasons.‘ For example, if statistical * conclusions are based on incomplete information, one may arrive at fallacious conclusions/Thus the argument that drinking beer is bad-for longevity becausc 99% of the persons who take beer dic before the age of 100 years is statistically defective, since we are not told what percentage of persons who do not drink beer die before reaching that age. Statistics are like clay and they can be moulded in any manner so as to establish right or wrong conclusions. In this context Wd. King pointed out “one of the shortcomings of statistics is that they do not bear on there face the label of their quality.” Moreover, any Tom, Dick and Harry cannot deal with statistics, It requies experience and skill to draw sensible conclusions from the data; otherwise, there is Ge a wood pore interpretation. The very fact that it may lead to fallacious conclu- Perienced people limits the possibility of mass popularity of such a useful science. Also, statistics cannot be used to full advante 4 > s ‘age in the absence of pri 7 standing of the subject to which it is applied, 8 i 1.8. DISTRUST OF STATISTICS By distrust of statistics we mean lack of confidence in statistics istic methods. Its often commented by people," IM Statistical statements and statistical th ‘ 1 fatistics can rove anytl g” of lies, damned lies and statistics—wicked in the order of then eae Orava Park beset stated: “Statistics are like miniskirts, they cover up the essentials but give you the ideas.” The following three main reasons account for such views about satietcn * . 1. Figures are convincing and, therefore, people are easily led to believe them. * For an excellent account of how Statistics ean be used and mis a Use und Abuse of Statistics: Oxford University Press, London Please Fefer to: Reichmann, W.,.STATISTICS—WHAT AND WHY 115 2. They can be manipulated in such a manner as to establish foregone conclusions 3. Even if correct figures ure used they may be presented in such a manner that the reader is misled, For cxample, note the following statement: “The profits of firm A are Rs 40,000 for 1994-95 and that B Rs $0,000 for the sume period”. On the basis of this information one would form the opinion that firm Bis decidedly better than firm A. However, if we examine the amount of capital invested in both the firms, the quality of work done, etc., we might reach a different conclusion. Hence, while making use of statistics one should not only avoid outright falschood but also be alert to detect possible distortion of truth. The various ways in which statistics are often misused shall be discussed in detail in a subse- quent chapter. Suffice here to know that Statistics neither proves anything nor disproves any- thing, It is only a tool, ie, a method of approach. Tools, if properly used, do wonders and, if misused, prove disastrous. The same is true of statistical tools. If used properly, they help in taking wise decisions and if misused they can do more harm than good. But the fault does not lie with the science of Statistics as such. A few interesting examples can be cited to illustrate the point. Medicines are meant for curing people, but if a wrong medicine is taken or an exces- sive dose of a medicine is taken a person may die. We cannot blame the medicine for such a result. Similarly, if a child cuts his finger with a sharp knife, it is not the knife that is to blame, but the person who kept the knife at a place that the child could get it. These examples help us in emphasising that if statistical facts are misused by some people it would be wrong to blame the science as such. It is the people who are to blame. In fact statistics are like clay of which one can make a God or a Devil as he pleases. 1.9. STATISTICAL METHODS ys. EXPERIMENTAL METHODS Man acquires knowledge from a variety of sources. In early times, it was believed that ac- quiring knowledge was a matter of chance and its sources were unknown. But the tremendous advance in human knowledge that has taken place in the last two centuries is mainly duc to the adoption of systematic methods and not just a matter of chance. Such methods as are systemati- cally used in enlarging knowledge are known as scientific methods. There are two primary methods employed for advancing knowledge, namely, experimental methods and statistical methods. Experimental methods are the best known of scientific methods and have been historically most fruitful Under this method, cause and effect relations are often established or investigated within a controlled set-up in the laboratory. The experimental methods, however, can be adopted only in the physical and natural sciences like Physics, Chemistry, Astronomy, ctc., wherein it is possible to isolate individual causes and specific effect for closer observation and analysis. In most cases quantitative as well as qualitative aspects of a physical Phenomenon are also measurable. In social sciences like Economics, Political Science, Sociology, etc,, it is difficult to apply experimental methods inasmuch as the various forces affecting a particular phenomenon cannot be studied in isolation nor are they measurable with precision in all cases. For example, if one were to specify the significance of various causes determining the price of wheat in India, the application of experimental methods would require the study of causal factor in isolation from others and measurement of the intensity of its effect—an impossible task. In order to determine the effect of a change in supply of wheat on its price, it would be necessary to ensure that tastes of people, attitude of trader to change in supply, disposable funds of people, etc., can be studied in isolation. However, these factors are so inextricably bound up with each other that it would be very difficult to isolate any one of them for experimental purposes. However, it would be wrong to ignore altogether those fields. Here experimental methods cannot be applied. In such cases resort may be had to statistical methods. In applying statistical methods a problem is studied systematically as in the experimental methods, but the system used is not the same. Here we allow all forces to operate since they cannot be kept constant. We then record the variations in the forces and try to determine the part played by each in influencing the result. Undoubtedly, this method is ordinarily more difficult than experimental method and the results are not as accurate but they are decidedly better than no results. Pointing out the im- Portance of statistical methods, Croxton and Cowden have remarked, without an adequateao & st vi at ca ne sti eo STAT ISTICS_wiy,, A 1.16 ' , Noy estigutor in social sciences may frequenyy ty 2 of statiatics, the investigator In Soci Seen es in D be tn, understanding f See aa a black cat that isn es ii ie thods of sansa the roe edening range human actites any ld Of HOURHE in which yyy val an evernividening range ¢ deta la be hed” ction between the experi may ¢ noted that the distinctio imental However, it should be noted tha nd arbitrary and should not be taken mel ds ang be ie is a | at cl ods is somewhat formal y 1 thos ae eee In practice, the scientists often SE eee experimental ge et and definite, of fact, most important of is methods ong 7 ce aa ca fields which we usually consider to be “exact of Physics and Astronomy- iss Aca oeRE a sm ‘other hand, even the social scientist can and does Ontrolled st 7 nthe investigation. It may also be pointed out that the ae ee is not the only metho)” hig ployed in esearch nor the best approach to problem. Just asthe CaBenter asa number cach appropriate for a different sort of operation, so also the researcher can avait py ° to Science,” fielg, i i is ms various techniques which are the tools of his trade and each of which is appropriate welt cf type of station, Which technique of echnignes should be applied in a Pati f investigation. Just as the choice of a wi tion would primarily depend upon the object o! si the carpenter is likely to spoil the work the choice of a wrong method by the statistician ely similarly lead to wrong conclusions. i 1.10. STATISTICS AND COMPUTER Some people have an impression that the study of statistics necessarily involves the Study of computer also. However, this is not true—the computer science and Statistics are different disci plines. Needless to say thatthe computer is an extremely useful tool which can be applicy « the solution of statistical and many other types of problems. The computer has made it Possible to undertake statistical studies that involve the compilation and analysis of large masses of data and several variables. The computations can be performed easily and quickly with the help of computer particularly when standard or packaged programmes are available. The computations required in the solution to several practical business, economic and other type of problems involving volumes of data of varied type are very tedious and lengthy. In the text book no further reference to computer is made for the reasons given below: I. The illustrations and problems given in this text are simple, not too long or complicated and can easily be solved with the help of simple arithmetic. 2. Solving problems is a part of learning process. Statistical methods cannot be learnt nor the logic of techniques be assimilated if the computer does all or most of the work. 3. The book provides knowledge of several statistical tools which are of vital use in decision- making and as such devoted entirely to statistics. __ It may be Suggested that in any practical situation in which a problem is too complex involv- ing lot of computations, computer help be taken, However, no computer, howsoever latest and sophisticated it may be, is capable of formulating the problem—It is only a‘ person who can do at. While making computations involved in the study of various statistical tools, the students are advised not to use calculators as still in most Indian Universities* and Universities in other parts of the underdeveloped and developing world the use ot calculators is not permitted in the eX amination—at the most slide rules are allowed, The logic of this suggestion is simple—if one is accustomed right from the beginning to do calculations calculator he will find it difficult even to add 2+2 what to speak of division, multiplication underroots, ete “However, every stude should at least see the calculator and know its use,” N4*7*O0tS, etc. However, * It may be pointed out that students definitely want o rmination and the matter is also taken up with the Univers tater Une awed in NS icult 105170 calculators to all examinees and poor students find tg, buy and hence even to those we? can aor ca tors are ot I this is done those wo ea oyna be put 120d advantage and injustice would be done to them, cannot afforSTATISTICS—WHAT AND WHY 117 TRY YOURSELF Theory Questions 12, 13. 14, 15. 16. (a) Define ‘Statistics’, Discuss the limitations of the subject ‘Statistics’. (8.Com., Osmania Univ.) (6) Define statistics and discuss its scope and limitations. (c) Define statistics. Explain the characteristics and limitations of statistics. (B.Com., S.V. Univ.) (a) Discuss briefly the role of statistical methods in economic planning with special reference to India, (B.Com., Kerala Univ.) (b)_ What is statistics ? Throw the light of its importance in the field of Business and Commerce. (B.Com, Jabalpur Univ.) (c) Explain the importance of statistics to a businessman, an economist, a social worker and the government. (B.Com., S.V. Univ.) (a) “Statistics are like clay of which you can make a God ar Devil as you please.” (B.Com., M.D. Univ.) (6) In the light of the above statement discuss the uses and limitations of statistics. (B.Com., Andhra Univ.) (©) Explain the function and limitations of statistics, (B.Com., Gorakhpur Univ.) “Statistics is the science of averages. Do you agree with this view? If not, give reasons and suggest a proper definition, (B.Com., Andhra Univ.) Define ‘statistics’, and point out the main difficulties that a statistician has to face as compared with a physicist or chemist. (B.Com,, Andhra Univ.) “Statistics is a scientific method.” (B.Com., Punjab Univ.) “Statistics is a body of methods for making wise decision in the face of uncertainty.” Comment on the statement bringing out clearly how does statistics help in business decision-making. “Statistics is the science of estimates and probabilities.” Elucidate the above statement and give a more comprehensive definition of the science of statistics. Discuss in details the importance of Statistics with special reference to business and industry. Discuss the meaning and scope of statistics bringing out its importance particularly in the field of trade and commerce. (a) “Statistics affects every body and touches life at many points. It is both a science and an art.” Explain the above statement with suitable examples. (B.Com, Rajasthan Univ.) (6) Explain with five illustrations the use of statistics in the field of business. (B.Com., M.D. Univ., 2004) “The science of statistics is a most useful servant but only of great value to those who understand its proper use.” (King) ‘Comment on the above statement and discuss the limitations of statistics. (B.Com., Kurukshetra Univ., 2005) Give your opinion on the following: (a) “Figures do not lie, but liars figure (6) There are three types of liars: (i) Liars, (i/) Damn liars, and (iii) Statisticians. - (B.Com., Lucknow Univ., 2006) (c) “There are lies, dammed lies and statistics.” (a) “Statistical methods are most dangerous tools in the hands of the inexpert.” Elucidate (b) How can statistics be misused? Give examples. Give your opinion on the followin; (a) Statistics can prove anything; (b) Statistics is the science of averages; and (c)_ Statistics is science of estimates and probabilities. Berne is essentially an applied science. Its only justification lies in the help it can give in solving problem.” Inthe light of the above statement, explain, with illustration, how statistics can be helpful in solving business problems.STATISTICS —Witgr gy should be, but rarely arg Py 18 opal of aringo—they sould be, 'Y are, studieg and OnSiderg its, 2. eStanics are Uke Po i all round mer 18 and limitations of statistic, a \ deliberately. UPO! 1, examine the function: (B.C s. peat the staroment ‘om, Goratipyp Uni, 35 n ts numeric ; | statements of facts but iv Ft red NE NOt statisg a ~stanses are nUmericat A sate briefly which nu . OF Facts are non gti.” 1s. “Stans ent upon the statement (B.Com., BHU, 2002; B.Com., Gorakhpyy Unig ities. v9 on sci asa Blind man does Tamp-post for suppor gt: 2 stasis should not be Ui (B.Com. Mi 10. a illumination.” Discuss. (b) “Science without Statist ‘ the above statement will , leerut Uniy, ot ties bears no fruit and Statistics without science has 0 root Fe 2 th necessary comments. von a (8.Com., Kurukshetra Univ, 2001; B.Com., Osmanig Un, zo is and synthesis by means of whi” those devices of analysis an means of wii I coher used to explain or describe phenomena, either in a apmatiee-Secris Elucidate the tatement rel investigator in social sciences “Without adequate Saar ‘black cat that fs net there.” Comment ea Ik i vanded tthe field of natural sciences also?” (B.A. (H) Beso, Delhi Univ, 2093 22. Comment bey onthe fllowing statements . (a) “Sats isthe science of human welfare.” andetealwhae (Saisie ark bikns— they reveal what interesting and conceal whats vie (9) “Toney sing dee ar utes beso a statsticaleutre.” ‘ (o) “Thepocice of sass witout ene isa dangerous occupation.” (e) “Statistical thinking will one day be as necessary for efficient citizenshi, and write.” 23, (a). Define statistics. How does it help a manager? (6). Statistics isthe science of estimates and probabilities, comprehensive definition ofthe science of statistics, 24. “The fundamental gospe! of statistics to push back the domain of ignorance, oF premature decisions, traditions and dogmatism and to increase the dot are made and principles are formulated on the basis of analysed quanti Statement with the help of afew business examples, Slatis 20, “Statistical meth ties ‘heir individual ge P as the ability to read “Explain the statement and give a more (B.Com., Utkal Univ.) Tule of thumb, arbitrary main in which decisions tative facts.” Explain the 25. (a) Discuss briefly the various limitations of statistics (6) What are the chief characteristics of statistics? (B.Com., Delhi Univ.) (©) “Statistics only fumishes a tool, necessary though imperfect, which is dangerous in the hands of those who do not know its use and deficiencies,” In the light of this ‘statement, examine the chief function and limitations of statistics, (B.Com. (H), BHU, 2004) Objective Type Questions 26. Fill in the blanks: (The word statistics is used in sense namely —and (i) The word statisti i i : wags res either information or to a method of dealing with (iit) The word ‘statistics’ is derive fro is the real giant in the devel ; () “Statistics is a method of ‘opment of the theory of statistics. Sanath.” — Ya Tan Choy. HOF uncertainty ofthe bass of numeri at (vi) “Statistics are the 4 Marshall, ————~ °F Which I ike every other economist, have to make bricks.” {Ans. (i) two, singular, plural, (ii itati is () Decision-Making, (vj Straw’ (2 Ste, qualitative, (ii) status, (jv) Ronald Fisher m the Latin word