Q.Explain the importance of Statistics.

Statistics is valuable because it expresses facts precisely in numbers, condenses bulky data, facilitates comparison, reveals relationships, helps in forecasting and planning, and provides a sound basis for forming and testing economic policy.

Meaning

Statistics, in the plural sense, means numerical data, and in the singular sense it is the science of collecting, organising, presenting, analysing and interpreting such data. In economics it is an indispensable tool because economic phenomena like income, production, prices and employment are largely quantitative.

Importance (functions) of statistics

• Presents facts in definite form: Statistics turns vague statements into precise numerical facts, making them clear and convincing.
• Condenses and simplifies data: It reduces a large mass of figures into a few meaningful measures such as averages and percentages.
• Facilitates comparison: By using totals, averages, ratios and percentages, statistics allows comparison of two or more sets of data over time or between regions.
• Studies relationships: Techniques like correlation and regression reveal the relationship between variables, for example between price and demand.
• Helps in forecasting: Time-series and trend analysis help predict future values of economic variables.
• Aids policy formulation and planning: Governments and businesses use statistics to frame budgets, plans and policies and to test their results. …