Importance of Statistics in Different Fields

Statistics plays a vital role in every fields of human activity. Statistics has important role in determining the
existing position of per capita income, unemployment, population growth rate, housing, schooling medical
facilities etc…in a country. Now statistics holds a central position in almost every field like Industry,
Commerce, Trade, Physics, Chemistry, Economics, Mathematics, Biology, Botany, Psychology, Astronomy
etc…, so application of statistics is very wide. Now we discuss some important fields in which statistics is
commonly applied.

(1) Business:
Statistics play an important role in business. A successful businessman must be very quick and
accurate in decision making. He knows that what his customers wants, he should therefore, know what to
produce and sell and in what quantities. Statistics helps businessman to plan production according to the
taste of the costumers, the quality of the products can also be checked more efficiently by using statistical
methods. So all the activities of the businessman based on statistical information. He can make correct
decision about the location of business, marketing of the products, financial resources etc…

(2) In Economics:
Statistics play an important role in economics. Economics largely depends upon statistics. National
income accounts are multipurpose indicators for the economists and administrators. Statistical methods are
used for preparation of these accounts. In economics research statistical methods are used for collecting and
analysis the data and testing hypothesis. The relationship between supply and demands is studies by
statistical methods, the imports and exports, the inflation rate, the per capita income are the problems which
require good knowledge of statistics.

(3) In Mathematics:
Statistical plays a central role in almost all natural and social sciences. The methods of natural
sciences are most reliable but conclusions draw from them are only probable, because they are based on
incomplete evidence. Statistical helps in describing these measurements more precisely. Statistics is branch
of applied mathematics. The large number of statistical methods like probability averages, dispersions,
estimation etc… is used in mathematics and different techniques of pure mathematics like integration,
differentiation and algebra are used in statistics.

(4) In Banking:
Statistics play an important role in banking. The banks make use of statistics for a number of
purposes. The banks work on the principle that all the people who deposit their money with the banks do
not withdraw it at the same time. The bank earns profits out of these deposits by lending to others on
interest. The bankers use statistical approaches based on probability to estimate the numbers of depositors
and their claims for a certain day.

(5) In State Management (Administration):

Statistics is essential for a country. Different policies of the government are based on statistics.
Statistical data are now widely used in taking all administrative decisions. Suppose if the government wants
to revise the pay scales of employees in view of an increase in the living cost, statistical methods will be
used to determine the rise in the cost of living. Preparation of federal and provincial government budgets
mainly depends upon statistics because it helps in estimating the expected expenditures and revenue from
different sources. So statistics are the eyes of administration of the state.

(6) In Accounting and Auditing:

Accounting is impossible without exactness. But for decision making purpose, so much precision is
not essential the decision may be taken on the basis of approximation, know as statistics. The correction of
the values of current asserts is made on the basis of the purchasing power of money or the current value of
it.
In auditing sampling techniques are commonly used. An auditor determines the sample size of the
book to be audited on the basis of error.

(7) In Natural and Social Sciences:

Statistics plays a vital role in almost all the natural and social sciences. Statistical methods are
commonly used for analyzing the experiments results, testing their significance in Biology, Physics,
Chemistry, Mathematics, Meteorology, Research chambers of commerce, Sociology, Business, Public
Administration, Communication and Information Technology etc…

(8) In Astronomy:
Astronomy is one of the oldest branch of statistical study, it deals with the measurement of distance,
sizes, masses and densities of heavenly bodies by means of observations. During these measurements errors
are unavoidable so most probable measurements are founded by using statistical methods.
Example: This distance of moon from the earth is measured. Since old days the astronomers have been
statistical methods like method of least squares for finding the movements of stars.

History of Statistics

The Word statistics have been derived from Latin word “Status” or the Italian word “Statista”,
meaning of these words is “Political State” or a Government. Shakespeare used a word Statist is his drama
Hamlet (1602). In the past, the statistics was used by rulers. The application of statistics was very limited
but rulers and kings needed information about lands, agriculture, commerce, population of their states to
assess their military potential, their wealth, taxation and other aspects of government.

Gottfried Achenwall used the word statistik at a German University in 1749 which means that
political science of different countries. In 1771 W. Hooper (Englishman) used the word statistics in his
translation of Elements of Universal Erudition written by Baron B.F Bieford, in his book statistics has been
defined as the science that teaches us what is the political arrangement of all the modern states of the known
world. There is a big gap between the old statistics and the modern statistics, but old statistics also used as a
part of the present statistics.

During the 18th century the English writer have used the word statistics in their works, so statistics
has developed gradually during last few centuries. A lot of work has been done in the end of the nineteenth
century.

At the beginning of the 20th century, William S Gosset was developed the methods for decision
making based on small set of data. During the 20th century several statistician are active in developing new
methods, theories and application of statistics. Now these days the availability of electronics computers is
certainly a major factor in the modern development of statistics.

Meanings of Statistics

The word statistics has three different meanings (sense) which are discussed below:
(1) Plural Sense (2) Singular Sense (3) Plural of the word “Statistic”

(1) Plural Sense:

In plural sense, the word statistics refer to numerical facts and figures collected in a systematic
manner with a definite purpose in any field of study. In this sense, statistics are also aggregates of facts
which are expressed in numerical form. For example, Statistics on industrial production, statistics or
population growth of a country in different years etc.
(2) Singular Sense:
In singular sense, it refers to the science comprising methods which are used in collection, analysis,
interpretation and presentation of numerical data. These methods are used to draw conclusion about the
population parameter.

For Example: If we want to have a study about the distribution of weights of students in a certain college.
First of all, we will collect the information on the weights which may be obtained from the records of the
college or we may collect from the students directly. The large number of weight figures will confuse the
mind. In this situation we may arrange the weights in groups such as: “50 Kg to 60 Kg” “60 Kg to 70 Kg”
and so on and find the number of students fall in each group. This step is called a presentation of data. We
may still go further and compute the averages and some other measures which may give us complete
description of the original data.

(3) Plural of Word “Statistic”:

The word statistics is used as the plural of the word “Statistic” which refers to a numerical quantity
like mean, median, variance etc…, calculated from sample value.

For Example: If we select 15 student from a class of 80 students, measure their heights and find the
average height. This average would be a statistic.

Kinds or Branches Statistics

Statistics may be divided into two main branches:

(1) Descriptive Statistics (2) Inferential Statistics

(1) Descriptive Statistics:

In descriptive statistics, it deals with collection of data, its presentation in various forms, such as
tables, graphs and diagrams and findings averages and other measures which would describe the data.

For Example: Industrial statistics, population statistics, trade statistics etc… Such as businessman make to
use descriptive statistics in presenting their annual reports, final accounts, bank statements.

(2) Inferential Statistics:

In inferential statistics, it deals with techniques used for analysis of data, making the estimates and
drawing conclusions from limited information taken on sample basis and testing the reliability of the
estimates.

For Example: Suppose we want to have an idea about the percentage of illiterates in our country. We take
a sample from the population and find the proportion of illiterates in the sample. This sample proportion
with the help of probability enables us to make some inferences about the population proportion. This study
belongs to inferential statistics.
The major use of inferential statistics is to use information from a sample to infer something
about a population.

Functions or Uses of Statistics

(1) Statistics helps in providing a better understanding and exact description of a phenomenon of nature.

(2) Statistical helps in proper and efficient planning of a statistical inquiry in any field of study.

(3) Statistical helps in collecting an appropriate quantitative data.

(4) Statistics helps in presenting complex data in a suitable tabular, diagrammatic and graphic form for an
easy and clear comprehension of the data.

(5) Statistics helps in understanding the nature and pattern of variability of a phenomenon through
quantitative obersevations.

(6) Statistics helps in drawing valid inference, along with a measure of their reliability about the population
parameters from the sample data.

Collection of Statistical Data

Statistical Data:
A sequence of observation, made on a set of objects included in the sample drawn from population
is known as statistical data.

(1) Ungrouped Data:

Data which have been arranged in a systematic order are called raw data or ungrouped data.

(2) Grouped Data:

Data presented in the form of frequency distribution is called grouped data.

Collection of Data:
The first step in any enquiry (investigation) is collection of data. The data may be collected for the
whole population or for a sample only. It is mostly collected on sample basis. Collection of data is very
difficult job. The enumerator or investigator is the well trained person who collects the statistical data. The
respondents (information) are the persons whom the information is collected.

Types of Data:
There are two types (sources) for the collection of data.
(1) Primary Data (2) Secondary Data

(1) Primary Data:

The primary data are the first hand information collected, compiled and published by organization for
some purpose. They are most original data in character and have not undergone any sort of statistical
treatment.
Example: Population census reports are primary data because these are collected, complied and published
by the population census organization.

(2) Secondary Data:

The secondary data are the second hand information which are already collected by some one
(organization) for some purpose and are available for the present study. The secondary data are not pure in
character and have undergone some treatment at least once.
Example: Economics survey of England is secondary data because these are collected by more than one
organization like Bureau of statistics, Board of Revenue, the Banks etc…

Methods of Collecting Primary Data:

Primary data are collected by the following methods:

 Personal Investigation: The researcher conducts the survey him/herself and collects data from it.
The data collected in this way is usually accurate and reliable. This method of collecting data is only
applicable in case of small research projects.

 Through Investigation: Trained investigators are employed to collect the data. These investigators
contact the individuals and fill in questionnaire after asking the required information. Most of the
organizing implied this method.

 Collection through Questionnaire: The researchers get the data from local representation or agents
 that are based upon their own experience. This method is quick but gives only rough estimate.

 Through Telephone: The researchers get information through telephone this method is quick and
give accurate information.

Methods of Collecting Secondary Data:

The secondary data are collected by the following sources:

 Official: e.g. The publications of the Statistical Division, Ministry of Finance, the Federal Bureaus
of Statistics, Ministries of Food, Agriculture, Industry, Labor etc…

 Semi-Official: e.g. State Bank, Railway Board, Central Cotton Committee, Boards of Economic
Enquiry etc…

 Publication of Trade Associations, Chambers of Commerce etc…

 Technical and Trade Journals and Newspapers.

 Research Organizations such as Universities and other institutions.

Difference between Primary and Secondary Data:

The difference between primary and secondary data is only a change of hand. The primary data are
the first hand data information which is directly collected form one source. They are most original data in
character and have not undergone any sort of statistical treatment while the secondary data are obtained
from some other sources or agencies. They are not pure in character and have undergone some treatment at
least once.
For Example: Suppose we interested to find the average age of MS students. We collect the age’s data by
two methods; either by directly collecting from each student himself personally or getting their ages from
the university record. The data collected by the direct personal investigation is called primary data and the
data obtained from the university record is called secondary data.

Editing of Data:
After collecting the data either from primary or secondary source, the next step is its editing. Editing
means the examination of collected data to discover any error and mistake before presenting it. It has to be
decided before hand what degree of accuracy is wanted and what extent of errors can be tolerated in the
inquiry. The editing of secondary data is simpler than that of primary data.

Population and Sample

The major use of inferential statistics is to use information from a sample to infer something
about a population.

A population is a collection of data whose properties are analyzed. The population is

the complete collection to be studied, it contains all subjects of interest.

A sample is a part of the population of interest, a sub-collection selected from a population.

A parameter is a numerical measurement that describes a characteristic of a population, while

a sample is a numerical measurement that describes a characteristic of a sample. In general, we
will use a statistic to infer something about a parameter.
Ex. Joe D. Politician is running for President. He calls you on the phone and asks you to find out
what percentage of the registered voters in the country will vote for him. There are a few things
you could try.

Option I : Call all registered voters on the phone and ask them who they will vote for.

Although this would provide a very accurate result, it would be a very tedious and time
consuming project. All registered voters represent the population of interest here, and a better
approach would be to use a sample.

Option II : Call 4 registered voters, 1 in each time zone, and ask them who they will vote for.

Although this is a very easy task, the results would not be very reliable. To use a sample to make
inferences about a population, the sample should be representative of the population. How likely
is it that these 4 registered voters would represent the population of all registered voters? Not
very! The sample needs to look just like the population, but smaller.

Option III : Somewhere between Option I and Option II.

We want to use a method that will be easier than Option I, but more reliable than Option II.

So, you randomly select 2000 registered voters and poll them. 1,120 (56%) tell you that they will
vote for Joe.

The population of interest here is all registered voters, and the parameter is the percentage of
them that will vote for Joe.

The sample is the 2000 registered voters that were polled, and the statistic is the percentage of
them that will vote for Joe.

You can tell Joe that approximately 56% of all registered voters will vote for him.

Ex. In a Statistics class of 40 students, 24 had a credit card with them.

The statement "60% of the students in this Statistics class had a credit card with them" is a
descriptive statement. The population is the 40 students in this Statistics class. The 60%
represents a parameter.

The statement "60% of the students in all classes have a credit card with them" is an inferential
statement. The 40 students in this Statistics class represent a sample of students in all classes.
The 60% represents a statistic.

Sample (statistics)
From Wikipedia, the free encyclopedia

In statistics, a sample is a subset of a population. Typically, the population is very large, making
a census or a complete enumeration of all the values in the population impractical or impossible. The
sample represents a subset of manageable size. Samples are collected and statistics are calculated from
the samples so that one can make inferences or extrapolations from the sample to the population. This
process of collecting information from a sample is referred to as sampling.

A complete sample is a set of objects from a parent population that includes ALL such objects that satisfy
a set of well-defined selection criteria. For example, a complete sample of Australian men taller than 2m
would consist of a list of every Australian male taller than 2m. But it wouldn't include German males, or tall
Australian females, or people shorter than 2m. So to compile such a complete sample requires a complete
list of the parent population, including data on height, gender, and nationality for each member of that
 parent population. In the case of human populations, such a complete list is unlikely to exist, but such
complete samples are often available in other disciplines, such as complete magnitude-limited samples of
astronomical objects.

An unbiased sample is a set of objects chosen from a complete sample using a selection process that
does not depend on the properties of the objects. For example, an unbiased sample of Australian men taller
than 2m might consist of a randomly sampled subset of 1% of Australian males taller than 2m. But one
chosen from the electoral register might not be unbiased since, for example, males aged under 18 will not
be on the electoral register. In an astronomical context, an unbiased sample might consist of that fraction of
a complete sample for which data are available, provided the data availability is not biased by individual
source properties.

The best way to avoid a biased or unrepresentative sample is to select a random sample, also known as a
probability sample. A random sample is defined as a sample where each individual member of the
population has a known, non-zero chance of being selected as part of the sample. Several types of random
samples are simple random samples, systematic samples, stratified random samples, and cluster random
samples.

A sample that is not random is called a non-random sample or a non-probability sampling. Some examples
of nonrandom samples are convenience samples, judgment samples, purposive samples,quota
samples, snowball samples, and quadrature nodes in quasi-Monte Carlo methods.

[edit]Mathematical description of random sample

In mathematical terms, given a random variable X with distribution F, a random sample of

length n (where n may be any of 1,2,3,...) is a set of n independent, identically distributed (iid) random
variables with distribution F.[1]

A sample concretely represents n experiments in which the same quantity is measured. For example,
if X represents the height of an individual and n individuals are measured, Xi will be the height of the i-th
individual. Note that a sample of random variables (i.e. a set of measurable functions) must not be confused
with the realizations of these variables (which are the values that these random variables take, formally
called random variates). In other words, Xi is a function representing the measurement at the i-th
experiment and xi = Xi(ω) is the value actually obtained when making the measurement.

The concept of a sample thus includes the process of how the data are obtained (that is, the random
variables). This is necessary so that mathematical statements can be made about the sample
andstatistics computed from it, such as the sample mean and covariance.

Types of Random Sampling Techniques

Sampling is the process of getting information from only part of a larger group. The two types of sampling
are random sampling and nonrandom sampling. Nonrandom sampling uses some criteria for choosing the
sample whereas random sampling does not. The four types of random sampling techniques are simple
random sampling, systematic sampling, stratified random sampling and cluster random sampling.
Related Searches:
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Statistical Sampling
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Sampling Strategies
1. Simple Random Sampling
o Simple random sampling is the most basic and well-known type of random sampling technique. In simple
random sampling, every case in the population being sampled has an equal chance of being chosen. It is
an equal probability sampling method (EPSEM). EPSEMs are important because they produce
representative samples. The most basic way to do a simple random sample is to pull names out of a hat,
but today researchers usually use computer programs to select the samples.
 Systematic Sampling
o Systematic sampling, a variation of simple random sampling, is also an EPSEM. In systematic sampling,
you make a list of potential samples and then choose every nth element on the list as a sample. Choosing
samples is a three-step process, best illustrated by an example: The list has 10,000 potential samples, and
you want 1,000 samples. First, divide the number of potential samples by the number of desired samples to
arrive at a value called n (10,000 divided by 1,000 gives an n of 10). Second, select a random number
between one and the value arrived at Step 1 (for this example, let's choose 5). Third, start with a number
chosen in Step 2 and then use every nth potential sample. (In this example, start the sampling at 5 and then
use every 10th record -- 5, 15, 25...). Systematic sampling has the potential to be biased if the list has been
arranged in any type of order.
Stratified Random Sampling
o Stratified random sampling involves dividing the potential samples into two or more mutually exclusive
groups based on categories of interest in the research. The purpose is to organize the potential samples
into homogenous subsets before sampling. For example, you could divide the potential samples based on
gender, race or occupation. You then draw a random sample from each subset. Stratified random sampling
is common because it ensures that each subgroup of the larger group is adequately represented in the
sample.
The two types of stratified sampling random sampling are proportionate and disproportionate. In
proportionate sampling, the sample sizes are proportional to the population sizes. For example, if the
potential samples are 50 percent male and 50 percent female, the samples chosen are also 50 percent
male and 50 percent female. In disproportionate methods, the sample sizes are not proportional to the
population sizes.
Cluster Random Sampling
o In cluster random sampling, you randomly select clusters instead of individual samples in the first stage of
sampling. For example, a cluster might be a school, a team or a village. This technique is used when no list
of individual samples is available. Usually, the way this type of sampling is done is by starting at the higher
level clusters and then sampling at subsequent levels until individual samples are reached.

Sampling Techniques for Thesis Writing

By Joy Campbell, eHow Contributor

Sampling techniques for research are used to represent the targeted population.
Sampling starts by defining the target population. If the entire population is available for research, it is
referred to as a census study. A sampling is obtained when it is impossible to test or survey everyone in the
group being researched. The decision of who will be included in the sampling is called the sampling
technique. The results obtained through these samplings are the basis of a generalized conclusion that
represents the entire population. There are two methods of sampling, probability and non-probability.
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 Research Paper Writing
1. Probability
o Probability sampling is a random method of selection in a targeted population. To conduct randomized
samples, you need to make sure everyone in the population is given an equal chance to be chosen.
Simple Random Sampling
o The simplest sampling technique is the simple random sampling, which is a lottery method of randomly
picking from the targeted population. For instance, if a thesis is about malnourished students in a school,
your sample size is 50 and there are 200 malnourished students, put all 200 names in a hat and pick out 50.
Stratified Random Sampling
o Stratified or proportional sampling aims to find a population for the entire population and for subgroups
within the population. Taking the example on the previous technique, in the population of 200, there are 100
fifth-grade students, 50 second-grade students and 50 third-grade students. Since the sample size is 50 --
25 percent of the population -- you need to take 25 percent from each of the three grade levels. As a result,
you would have 25 fifth-graders and 12.5 second-graders and 12.5 third-graders. After determining the
number of samples per grade, proceed to the lottery method.
 Systematic Random Sampling
o Given that the total population is 100 and you need a sample of 20, divide the population with the sample
size -- 100/20 = 5. Since the product is 5, choose an integer between 1 and 5. Let's take the integer as 2.
Divide the total population (100) by the integer (2) and you get 50. Create a list of the names of the subjects
alphabetically in two columns, because the integer is 2. Write the names vertically. Following the chosen
integer once more, make two counts continuously. Every row that lands on the count of two is included in
the sample.
Cluster Random Sampling
o Stratified and systematic random sampling becomes a problem for large sample sizes, such as an entire
country. Cluster random sampling limits the population by creating subgroups within the population. For
example, the states on the West Coast could be one group and states in the east could be another.
Multi-Stage Sampling
o Most research requires a more complex sampling method, and applying a combination of simple, stratified,
systematic and cluster random samplings called multi-stage sampling addresses this need.
Non-probability Sampling
o Non-probability sampling does not involve random sampling. Although researchers consider random
sampling to be more reliable, it is not always the sensible or practical technique to use. Non-probability
sample techniques are accidental sampling or purposive sampling.
Accidental Sampling
o An example of accidental sampling is the news media interviewing people on the street. This technique is
used to get a quick public opinion. Another example of accidental sampling is when college professors use
students or medical researchers use available clients as a matter of convenience. These types of sampling
do not represent the population as a whole.
Purposive Sampling
o In this method, the researcher chooses the sample on his or her own because there are a limited number of
possible subjects. For instance, if your study is about botanists and there are only 10 botanists in the scope
area, you can automatically choose the 10 as your sample.

“The best thing about being a statistician is that you get to play in everyone else’s backyard.” John Tukey,
Princeton University