Ashwini.V M.

Com (MBA) MLA AHL, Malleswaram

CHAPTER 1: INTRODUCTION
ORIGIN AND DEVELOPMENT OF STATISTICS:
The word statistics seems to have been derived from the Latin word status or the Italian word statista or the German word statistik or the French word statistique . Sir Ronald A Fisher, known as father of statistics , placed statistics on a very sound footing by applying it to various diversified fields such as Genetics, Medicine, Education, Astronomy, War, Psychology, Agriculture and so on. The scope of the discipline of statistics broadened in the early 19th century to include the collection and analysis of data in general. Today, statistics is widely employed in government, business, and the natural and social sciences.

MEANING:
Statistics is the science of making effective use of numerical data relating to groups of individuals or experiments. It deals with all aspects of this, including not only the collection, analysis and interpretation of such data, but also the planning of the collection of data, in terms of the design of surveys and experiments.

DEFINITIONS:
Statistics are numerical statements of facts in any department of enquiry placed in relation to each other. Bowley Statistics may be defined as the aggregate of facts affected to a marked extent by multiplicity of causes, numerically expressed, enumerated or estimated according to a reasonable standard of accuracy, collected in a systematic manner, for a predetermined purpose and placed n relation to each other. Prof. Horace Secrist Statistics is the science which deals with the methods of collecting, classifying, presenting, comparing and interpreting numerical data collected to throw some light on any sphere of enquiry. -Selligman

Ashwini.V M.Com (MBA) MLA AHL, Malleswaram

CHARACTERISTICS:
1. Aggregate of Facts: Statistics always refers to a group of data. A single data cannot be called statistics. Aggregate of the figures of births, deaths, sales, purchase, production, profit, etc., will constitute Statistics.

2. Affected by Multiplicity of Causes: Statistical techniques have been devised to study the joint effect of a number of a factors on a single item (Multiple Correlation) or the isolated effect of a single factor on the given item (Partial Correlation) provided the effect of each of the factors can be measured quantitatively.

3. Numerically Expressed: Only numerical data constitute Statistics. For example: intelligence is not Statistics but the intelligence quotients which may be interpreted as the quantitative measure of the intelligence of individuals could be regarded as Statistics.

4. Enumerated or Estimated According to Reasonable Standard of Accuracy: The estimated values will not be as precise an accurate as the actual values. The degree of accuracy of the estimated values largely depends on the nature and purpose of enquiry. For example, while measuring the heights of individual accuracy will be aimed in terms of fractions of an inch whereas while measuring the heights of individuals accuracy will be aimed in terms of metres and if the places are very distant, example: Say Delhi and London.

5. Collected in a Systematic Manner: The data must be collected in a very systematic manner. Thus, for any socio-economic survey, a proper schedule depending on the object of enquiry should be prepared and trained personnel (investigators) should be used to collect the data by interviewing the persons.

6. Collected for a Pre-determined Purpose: For example: if the purpose of enquiry is to measure the cost of living index for low income group people, we should select only those commodities or item which are consumed or utilized by persons belonging to this group. Thus for such an index, the collection of the data on the commodities like scooters, cars, refrigerators, television sets, high quality cosmetics. Etc., will be absolutely useless.

7. Comparable: Statistical analysis the data should be comparable. They may be compared with respect to some unit, generally time (period) or place. 2

Ashwini.V M.Com (MBA) MLA AHL, Malleswaram

For example, the data relating to the population of a country for different years or the population of different countries in some fixed year constitute statistics, since they are comparable. All Statistics are numerical statements of facts but all numerical statements of facts are not Statistics.

IMPORTANCE AND SCOPE:

1. Statistics in Planning: Today efficient planning is a must for almost all countries, particularly the developing economies for their economic development and in order that planning is successful, it must be based on a correct and sound analysis of complex statistical data. 2. Statistics in State: In the old days statistics was the science of state-craft and its objective was to collect data relating to manpower, crimes, income and wealth, etc., for formulating suitable military and fiscal policies. 3. Statistics in Mathematics: Statistic may be considered to be an important member of the mathematics family. In the words of Connor, Statistics is a branch of applied mathematics which specializes in data. The interaction of mathematics and statistics started in the mid 17th century with the development of the theory of probability. 4. Statistics in Economics: Statistical data and advanced techniques of statistical analysis have proved immensely useful in the solution of a variety of economic problems such as production, consumption, distribution of income and wealth, wages, prices, profits, saving, expenditure, investment, unemployment s, poverty etc. 5. Statistics in Business and Management: The formulation of a production plan is a must and this cannot be achieved without collecting the statistical information without resorting to the powerful technique of Sample Surveys . As such, most of the leading business and industrial concerns have full-fledged statistical units with trained and efficient statisticians for formulating such plans and arriving at valid decisions in the face of uncertainty with calculated risks. 6. Statistics in Accountancy and Auditing: Statistics has innumerable applications in Accountancy & Auditing. The statistical data on some macro-variables like income, expenditure, investment, profits, production, saving, etc., are used for the compilation of National Income Accounts which provide information on the value added by different sectors of economy and are very helpful in formulating economic policies. In Accountancy, the statistics of assets and liabilities, and income and expenditure are helpful to ascertain the financial results of various operations.

Ashwini.V M.Com (MBA) MLA AHL, Malleswaram

7. Statistics in Industry: In industry, Statistics is extensively used in Quality Control . The main objective in any production process is to control the quality of the manufactured product, so that it conforms to specifications. Inspection plans are based on special kind of sampling techniques which are a very important aspect of statistical theory. 8. Statistics in Insurance: The success of an insurance company largely depends on the accuracy of the statistical data which is used for the construction of life tables. 9. Statistics in Physical Sciences: The statistical theory with the powerful tools of sampling, estimation, design of experiments, etc., is most effective for the analysis of the quantitative expression of all fields of study. There is an increasing use of Statistics in most of the physical sciences such as astronomy, geology, engineering, physics and meteorology. 10. Statistics in Social Sciences: The most important application of statistics in sociology is in the field of Demography for studying mortality (death rates), fertility (birth rates), marriages, population growth and so on. 11. Statistics in Psychology and Education: Statistics has been used very widely in education and psychology too. e.g., in the scaling of mental tests and other psychological data for measuring the reliability and validity of test scores. 12. Statistics in War: Not only in peace times but in war times also Statistics can be used effectively. It is practically impossible to face a war without the factual data concerning the military strength of the enemy in terms of manpower, military tanks, war aeroplanes, missiles, ammunition, etc.

LIMITATIONS OF STATISTICS:
Although Statistics is indispensable to almost all sciences-social, physical and natural, and is very widely used in almost all spheres of human activity, it is not without limitations which restrict its scope and utility. 1. Statistics does not study qualitative Phenomenon: Since statistics is a science deals with a set of numerical data, but it cannot be used directly for the study of quality characteristics like health, beauty, honesty, welfare, poverty, etc., which cannot be measured quantitatively. 2. Statistics does not study individuals: Since statistics deals with aggregate of facts, the study does not consider the individual measurements. Data are statistical when they relate to measurement of masses, not statistical when they relate to an individual item or event as a separate entity.

Ashwini.V M.Com (MBA) MLA AHL, Malleswaram

3. Statistical results are true only on an average: Since the statistical laws are probabilistic in nature, inferences based on them are only approximate and not exact like the inferences based on mathematical or scientific laws. 4. Statistics can be misused: It is merely a tool which, if rightly used may prove extremely useful, but if misused by inexperienced, unskilled and dishonest statisticians lead to very fallacious conclusions and even might prove to be disastrous. Statistics are like clay out of which one can make God or Devil

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