What is the importance of studying statistics?

What is the importance of studying statistics?

Importance

In recent years, statistics has occupied a dominant place in society. In the light of its significance, its scope as well as importance highlighted:

1. Statistics and Economics:

Statistics is an integral part of economics. Prof. Alfred Marshall, the renowned economist, in the year 1890, opined, “Statistics are the straw out of which I, like every other economist have to make bricks”. This opinion of Dr. Marshall signifies the importance of statistics in economics.

In fact, every sphere of economics takes support of statistics to prove various economic theories in it. For instance, in the field of production statistics helps us to adjust the demand according to supply.

Again, it is through statistical technique that a producer decides the level of maximum profit on the basis of data relating to cost and revenue of his product. Similar is true about consumption, distribution and planning where statistics plays an unavoidable role to realize the results.

2. Statistics and Business:

Statistics is extremely useful in modern activities of business. Business is full of risks and uncertainties. According to Boddington, “A successful businessman is one whose estimates most closely approach accuracy”. Every success in business depends on precision in forecasting.

Thus, a businessman must make a proper analysis of the past records to forecast the future business conditions. Moreover, every business man has to make use of the statistical tools to estimate the trend of prices and of economic activities. In short, business involves risk and when there is risk, it is better to have a calculated risk.

3. Statistics and State:

Statistics are the eyes of state as they help in administration. In the ancient times, the ruling kings and chiefs have to rely heavily on statistics to frame suitable military and fiscal policies. Similarly, modern states make tremendous use of statistical tools on various problems.

Before, implementing any policy, a state has to examine its pros and cons. For instance, before suggesting any remedial measures of the evil of crime, the state requires to make a deep statistical investigation of the problem.

Similarly, state conducts the population census to estimate the figures of national income and the prosperity of the country. In this way, state is the most single unit which not only collects the largest amount of statistics but also needs statistics on a very extensive scale.

4. Statistics and Economic Planning:

Modern age is the age of planning and without statistics planning is inconceivable. The days of laissez faire had gone and state intervention in every walk of life has become universal in character. Our future depends on proper planning. Thus, planning is only successful on accurate analysis of complex statistical data.

In India, the various plans that have been prepared or implemented, planners have made use of statistical data. Moreover, in our country, National Sample Survey Scheme was introduced to collect the statistical data for the use of planning. Statistical apparatus are employed not only to construct the plans but the success of every plan is judged by the use of statistical tools.

5. Statistics and other Activities:

Besides some important fields as discussed above, statistical tools are of great use to bankers, insurance companies, brokers, social workers, politicians, trade associations, chambers of commerce, research, astronomers, generally, take a large number of measurements, and in most cases there exists some difference between several observations.

Thus, to make the best possible measurement they have to employ the technique of law of errors in the form of the method of least square. Similarly, politicians and their supporters by sampling few voters prior to election can work out the percentage of votes the candidate will receive in the election.

Thus, statistical knowledge in fact is essential for a goods citizen. H.G. Wells has very aptly pointed out that, “Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write”.

6. Importance in Defense and War:

Statistical tools are very useful in the fields of defense and war because it helps to compare the military strength of different countries in terms of man power, tanks, war-aeroplanes, missiles etc. Moreover, it helps in planning future military strategy of the country. It helps to estimate the loss due to war. It helps to arrange the war finance.

7. Importance in Research:

Statistical techniques are of immense use in any research enquiry. In the field of industry and commerce, researches are made to fin out the causes of variations of different products.

Similarly, various market research is made with the help of statistical techniques. Even in literary field, various researches are made in which various types of statistical data are used.

8. Importance in Physical Sciences:

In the sphere of physical science like physics, chemistry, botany etc. a large number of measurements are taken which are found to vary from actual results.

Thus, to have an idea about the degree of accuracy maintained, statistical techniques are used together with the powerful tools of sampling, estimation, design of experiments etc.

9. Importance in Social Sciences:

In social sciences like sociology, psychology, education, economics, commerce, history etc. statistical techniques are frequently used in variety of problems. According to Bowley, “Statistics is the science measurement of social organism regarded as a whole in all its manifestations’