UNIT 1
Statistics
The word statistics is derived from the Latin word “Status” that means a group of numbers that represent some information of our human interest. In ancient periods, the use of statistics was made to meet the administrative needs of the state. In modern time, the statistics is not only used for administrative of the state alone, also evaluate all those activities in our lives which can be expressed in quantitative terms.
The term “statistics” is defined in two senses: - in singular and in Plural senses.
Firstly in plural sense, statistics means systematic collection of numerical facts. Secondly in singular sense, the term statistics means the various methods used for collection, analysis and interpretation of numerical facts. It is described as statistical method. In our study we are more concerned with the second meaning of statistics.
Definition
“Statistics is a body of methods for making wise decisions on the face of uncertainty.” —Wallis and Roberts
“Statistics is a body of methods for obtaining and analyzing numerical data in order to make better decisions in an uncertain world.” —Edward N. Dubois
Statistics are numerical statement of facts in any department of enquiry placed interrelation to each other.- Bouly.
The science of Statistics is essentially a branch of applied mathematics and can be regarded as a mathematics applied to observation data.- R.A fisher.
After analyzing the various definitions of statistics, the most proper definition of statistics are as follows
“Statistics in the plural sense are numerical statements of facts capable of some meaningful analysis and interpretation, and in singular sense, it relates to the collection, classification, presentation and interpretation of numerical data.”
Scope of statistics
Functions of statistics
Expression of facts in numbers – One of the important function of statistics is to express facts in definite form ie, in the form of numbers. The results expressed in definite form are more convincing than the result expressed on the basis of quality.
Presentation of facts – Statistics helps in presenting the complex data in a simple form, so that it becomes easy to understand. Statistical methods present data in the form of graph, diagram, average, coefficient, etc.
Comparison – After simplifying the data, it can be correlated and compared. Comparing data relating to fact is one of the functions of statistics as absolute figures convey less meaning.
It helps other science- Many laws of economic, law of demand, law of supply have been verified with the help of statistics.
Forecasting – Statistics also predicts future course of action. On the basis of estimates with the help of statistics we can make future policies.
Policy making – Statistics helps in formulating favorable policies. Based on the forecast the government makes policies.
Uses and importance of statistics
Importance for administrator administration – With the help of statistics, finance minister makes the use of revenue and expenditure data to prepare budget. Also it helps in taking decision regarding taxes.
Importance for businessman – statistics helps in providing relevant data. Thus with the help of those data a business man can estimate demand and supply of the commodity.
Importance in economics – statistics helps in measuring economics such as gross national output, consumption, saving, investment, expenditures, etc
Importance for politician – Politician use statistics in formulating economic, social and educational policies of the country
Importance in the field of education – statistics has wide application in education for determining the reliability and viability to a test, factor analysis, etc.
Limitation of statistics
Study of numerical facts only – statistical method does not study quantitative phenomena such as honesty, wisdom, etc. So experiments are done to measure the reaction of man through data.
Study of aggregates only – statistics study only aggregates of quantitative facts. It does not study any particular unit. Prof. Horace Sacrist defined statistics, “By statistics we mean aggregates of facts…. And placed in relation to each other”
It does not depict the entire story of phenomena – Any phenomena happen, due to many causes. But all the cause is not expressed in numbers. So, correct conclusion cannot be drawn. Analyzing quantitative data and ignoring qualitative data cannot give 100% conclusion.
Homogeneity of data – To compare the data, it is essential that whatever statistics are collected, the same must be uniform in quality.
It is liable to be miscued – As W.I. King points out, “One of the short-comings of statistics is that do not bear on their face the label of their quality.” Thus the data collected by inexperienced person may be dishonest or biased. So to get correct conclusion data must be used in caution.
Too many methods to study a problem –to find a single result many statistical methods are used. All the methods result vary in each case. “It must not be assumed that the statistics is the only method to use in research, neither should this method of considered the best attack for the problem.” —Croxten and Cowden
Both census and sampling provide information about a population. In census, each and every unit of population is studies. While in sampling small units are studied which represents the population. Government uses both census and sampling data for various purposes like planning, development programs, etc.
Census method
A well-organized procedure of gathering, recording and analyzing information regarding the members of the population is called a census. Under method census each and every unit of the universe is included in the collection of data. Huge amount of finance, time and labour are required for gathering information. This method is useful to find out the ratio of male to female, the ratio of literate to illiterate people, the ratio of people living in urban areas to the people in rural areas.
Merits
- It helps government with future plans
- It gives complete information about population
- It gives more reliable and accurate information
- It covers wide range of the study
Demerits
- It is time consuming and expensive
- Sometimes we many loose information while investing all individual
- It need a number of manpower
Sampling method
The sample is a small segment considered for study which represents the standard of entire population. The selection of sample should give justifiable conclusion about the whole population. When the population size is very large and it is difficult to consider all members then sampling method is used. Under this method selection of appropriate representative sample is utmost important. On the basis of data collected from sample, conclusion is drawn for the whole population.
Types of sampling method
- Probability sampling
- It is also called as random sampling
- Random sampling is one of the simplest sampling technique in which each sample have an equal chance of being chosen from the population
- It is an unbiased representation of the population
Types of random sampling
- Simple random sampling – It is one of the basic and easiest form of random sampling. Simple random sampling assures that every member have an equal chance of being included in the sample.
2. Stratified random sampling – It is also known as proportional random sampling. In this sampling technique, the populations are split into different groups. The overall sample selected randomly from different groups. This techniques guarantee that each group will be represented in sample.
3. Systematic random sampling – systematic random sampling refers to selecting sample on a system of interval in a numbered population.
4. Cluster random sampling – under cluster sampling, the researcher divide the population into separate groups known as cluster. Here each cluster represents the population as a whole. The researcher randomly selects the cluster for his analysis.
b. Non random sampling –
- It is also called as non probability sampling
- Non random sampling is one of the sampling technique in which each sample does not have an equal chance of being chosen from the population
- It is an biased representation of the population
Types of non random sampling
- Convenience sampling – under this technique, the samples are selected because they are easily accessible to the researcher. This technique is easiest, cheapest and less time consuming
2. Consecutive sampling – It is similar like convenience sampling. Under this technique all subjects that are available as a part of sample are included which result a better presentation of the entire population
3. Quota sampling – Under quota sampling, the samples are selected on the same proportions of individuals as the entire population depending on characteristics, traits as the basis of quota.
4. Judgmental sampling - Judgmental sampling is more commonly known as purposive sampling. The researcher keeps a specific purpose in mind and selects the subject for sampling process. The researcher believes that some subjects are fit for the research compared to other individuals.
5. Snowball sampling – this technique is used when the population size is small. Under snowball sampling, the researcher ask initial subject to identify another potential subject who meets the criteria of research. Thus, this technique hardly represents the population.
Primary data: -
Primary data is the information collected through original or firsthand research. Primary data is more reliable and authenticate as the data is nor changed or altered by any human beings. Also the data is not published yet. Primary data is gathered by any authorized organization, investigator, and enumerator.
“Data which are gathered originally for a certain purpose are known as primary data.” — Horace Secrist
Sources of primary data
The sources of primary data are as follows
- Experiments: In natural sciences, experiments are most reliable source of data collections. Experiments are conducted for medicine, psychological studies, nutrition and other scientific studies. Experiments are conducted in the fields as well as laboratories. The results of experiments are analyzed by statistical test and thereafter conclusions are drawn.
2. Survey: surveys are used in social science, management, marketing and psychology to some extent. Surveys are conducted in different methods.
3. Questionnaire: Questionnaires consist of list of question either open ended or close ended for which the participants answer. Questionnaire can be conducted via telephone, mail, institute, fax, etc.
4. Interview: Interviews are expensive method of data collection. The interviewer collects information from each respondent independently. It involves in-depth questioning and follow up question. While taking interview, the interviewer can observe the body language and other reaction to the question.
5. Observation: observation can be conducted with or without knowledge of the participants. Observation can be made either natural or artificially created environment.
Advantages
- Date interpretation is better – depending on the need of marketers, the data collected are examined and interpreted properly rather than relying on secondary data.
2. Efficient spending for information – Under primary research, the data collected specially for the purpose in mind. So the research funds are used efficiently unlike secondary research where marketer spent for information that is not needed.
3. Proprietary issue – information from primary research is their own and is not shared by any others. The information can be kept hidden from the competitors and also give added advantage from competitors who rely on secondary data.
4. Addresses specific research issue – primary research helps the marketers in getting that information which they want to know and report it in ways that benefit them. While information from secondary research may not fit the need of marketers.
5. Greater control – primary research not only focus on specific issue, it also enables the marketers to have greater control over the information collected. Such as location, time for completing project, etc.
Demerits
- High cost – primary research are very expensive compared to secondary research. It involves high expenses in preparing, designing and carrying out the research.
2. Time consuming – primary research starts from deciding to undertake a research project to the end point of having result is very time consuming compared to secondary research which can be collected in less time.
3. Inaccurate feedbacks – primary research involves taking feedback from target audience. There are high chances that feedback given is incorrect, as the audience can be biased or just give for sake of it.
4. More number of resources required – the data is collected from other resources like human resource, material which are needed in large quantity to do the survey. Also the data are collected from skilled person only.
Secondary data
Secondary data are public information that has been collected by others. The data collected from primary research and used by other is referred as secondary data. The secondary data may be obtained from various sources like industry surveys, database and information system, etc.
“The data which are used in an investigation, but which have been gathered originally by someone else for some other purpose are known as secondary data.” — Blair
Sources of secondary data
Government statistics – government statistics are widely available and easily accessible online. It provide information regarding trade activity, pricing and economic trends, business information, patents, population statistics, heath record, etc
Books – books are available on any topic you want to research. Books provide insight on how much information is given for a particular topic and you can prepare your literature review.
Journals – journals provide up to date information on the very specific topic on which you want to research. Journal is one of the most important sources for providing the information on data collected.
Magazine or newspaper – Newspaper or magazine provide daily information regarding politics, business, sports, fashion, etc which can be used for conducting research.
Internet – internet is becoming advance, fast and reachable to the masses and much information is available on internet. Almost all journals, books are available on internet. Some are free and others you have to pay price
Company website – companies website provide lots of information. They have a section called investor relations which contains full of annual reports, regulatory findings and investor presentations that can provide insights into both the individual company’s performance and that of the industry at large.
Advantages
1. Ease of access – Secondary research is easily available. In past secondary data was available in libraries or wait for the reports to be shipped. Currently, the data are available online and can be accessed any time.
2. Low cost to acquire – the researcher can get information at very low cost compared to carrying out research themselves. Time and money is saved in secondary data.
3. Clarification of research question – The use of secondary data helps in clarifying the research question. Sometimes secondary researches are done prior to primary research to clarify the research focus.
4. Difficulties in conducting primary research – sometimes primary research are difficult to be conducted due to time, cost, etc. Thus, secondary data are used to carry out the research and accordingly the results are drawn.
Disadvantages
Quality of research – primary researches are conducted and controlled by the researcher. Thus it ensures the validity of the information. While secondary researches are conducted by others. Thus the viability and reliability of the secondary data are questionable.
Not specific to researcher needs – in many cases, secondary research do not meet the researcher’s needs. While primary research gets information the way researcher wants.
Incomplete information – In many cases, researcher provide few information. To get the full version of the report they charge expensive fees.
Not timely – while using secondary research, the researcher should check the date of information. Sometimes out of date reports are available which is not relevant to the current market situations.
Sources
- B.N Gupta – Statistics
- S.P Singh – statistics
- Gupta and Kapoor – Statistics
- Yule and Kendall – Statistics method
