What are the important functions of Statistics?
The various functions performed by statistics in modern times are discussed under:
1. Simplification of Complex Facts:
The foremost purpose of the statistics is to simplify huge collection of numerical data. It is beyond the reach of human mind to remember and recollect the huge facts and figures. Statistical method makes it possible to understand the whole in the short span of time and in a better way.
Comparison of data is yet another function of statistics, simplifying the data; it can be correlated or compared by certain mathematical question like averages, ratios, coefficients etc.
In this regard Boddingtons opined that the object of statistics is to enable comparison to be made between past and present results will a view to ascertain the reasons for changes which have taken place and the effect of such changes in the future.
3. Relationship between Facts:
Statistical methods are used to investigate the cause and effect relationship between two or more facts. The relationship between demand and supply, money-supply and price level can be best understood with the help of statistical methods.
4. Formulation and Testing of Hypothesis:
The most theoretical function of statistics is to test the various types of hypothesis and discover a new theory. For instance, by using appropriate statistical tools we can test the hypothesis whether a particular coin is fair or not, whether Indian consumers are brand loyal etc.
Statistical methods are of great use to predict the future course of action of the phenomenon. It is only on the basis of statistical techniques that I planners in India prepare future estimates for production, consumption, investment etc.
6. Enlarges Individual Knowledge:
Statistical methods sharpen the faculty of rational thinking and reasoning of an individual. It is a master-key that solves problems of mankind in every sphere of life. Thus, Whipple has rightly opined statistics enables one to enlarge his horizon.
7. To Indicate Trend Behaviour:
Statistics helps to indicate trend behaviour certain fields of enquiry. The statistical techniques like Analysis of Time Series Extrapolation etc. are highly used to know the trend behaviour of the enquiry in question
8. Classification of Data:
Classification refers to a process of splitting up the data into certain parts which helps in the matters of comparison and interpretation of the various features of the data. This is done by the various improved techniques statistics.
9. To Measure Uncertainty:
In most of the social fields, comprising of business, commerce, economics, it becomes necessary to take decisions in the face of uncertainty and study the change of occurrence of certain events and their effect on the polio adopted.
10. To Draw Rational Conclusion:
In various fields of uncertainty like business and commerce, it is very much necessary to draw rational conclusions on the basis of facts collected and analyzed. For this, the mind of the decision maker should be free from any bias and prejudices.