Statistics in Economics

The special studies of a country's basic problems — poverty, inequality, the effects of disasters, and so on — all require that we know more about economic facts. Such facts are also called economic data, and this is where Statistics enters Economics.

The purpose of collecting data about economic problems is to understand and explain them in terms of the various causes behind them — that is, to analyse them. For instance, when we analyse the hardships of poverty, we try to explain it through factors such as unemployment, low productivity of people, and backward technology.

But analysis is not an end in itself; it serves the goal of finding ways to solve the problem. The measures designed to solve an economic problem are called policies. So there is a clear chain: reliable data make it possible to analyse a problem, and only a sound analysis makes it possible to frame effective policies. No analysis of an economic problem would be possible without data on the factors underlying it, and no policy could be formulated to solve it without such analysis. …