The word Statistics seems to have been derived from the Latin word “status” or the Italian word Statista. All word means a political state. In early year “statistics” equipped a collection of facts about the people in the state for administration or political purpose.
Webster defined statistics as “the classified facts representing the conditions of the people in a state, especially those facts which can be stated in numbers or in tables of numbers or in any tabular or classified arrangement.”
A comprehensive definition was given by Prof. Horace Secrist, which is a follows:-
“By Statistics we mean aggregates of facts affected to a marked extent by multiplicity of causes, numerically expressed, enumerated or estimated according to a reasonable standards of accuracy, collected in a systematic manner for a predetermined purpose and placed in relation to each other.”
The above definitions clearly points out certain characteristics which numerical data must possess in order that they may be called statistics. These are as follows:
1. Statistics are aggregates of facts: Single and isolated figures are not statistics because they cannot be compared and no meaningful conclusion can be drawn from it. It is the only aggregate of facts capable of offering some meaningful conclusion that constitute statistics.
(All statistics are expressed in numbers but all numbers are not statistics)
2. Statistics must be numerically expressed: Statistical methods are applicable only to those data which can be numerically expressed. Qualitative expressions like honesty, intelligence, sincere are not statistics unless they can be numerically expressed.
3. Statistics should be capable of being related to each other: Statistical data should be capable of comparison and connected to each other. If there is no apparent relationship between the data they cannot be called statistics.
4. Statistics should be collected in a systematic manner: For collecting statistical data a suitable plan should be prepared and work should be done accordingly.
5. Statistics should be collected for a definite purpose: The purpose of collecting data must be decided in advance. The purpose should be specific and well defined.
6. Statistics are affected to a marked extent by a large number of causes: Facts and figures are affected to a marked extent by the combined influence of a number of forces.
7. Reasonable standard of accuracy should be maintained in collection of statistics: Statistics deals with large number of data. Instead of counting each and every item, Statisticians take a sample and apply the result thus obtained from sample to the whole group. The degree of accuracy of sample largely depends upon the nature and object of the enquiry. If reasonable standard of accuracy is not maintained, numbers may give misleading result.
Functions of Statistics:
The functions of statistics are as follows:
1. It presents fact in a definite form: Numerical expressions are convincing and, therefore, one of the most important functions of statistics is to present statement in a precise and definite form.
2. It simplifies mass of figures: The data presented in the form of table, graph or diagram, average or coefficients are simple to understand.
3. It facilitates comparison: Once the data are simplified they can be compared with other similar data. Without such comparison the figures would have been useless.
4. It helps in prediction: Plans and policies of organisations are invariably formulated in advance at the time of their implementation. knowledge of future trends is very useful in framing suitable policies and plans.
5. It helps in formulating and testing hypothesis: Statistical methods like z-test, t-test, X2-test are extremely helpful in formulating and testing hypothesis and to develop new theories.
6. It helps in the formulation of suitable policies: Statistics provide the basic material for framing suitable policies. It helps in estimating export, import or production programmes in the light of changes that may occur.
7. Statistics indicates trend behavior: Statistical techniques such as Correlation, Regression, Time series analysis etc. are useful in forecasting future events.
Limitations of Statistics:
Limitations of statistics are as follows:
1. Statistics deals only with quantitative characteristics: Statistics are numerical statements of facts. Data Which cannot be expressed in numbers are incapable of statistical analysis. Qualitative characteristics like honesty, efficiency, intelligence etc. cannot be studied directly.
2. Statistics deals with aggregates not with individuals: Since statistics deals with aggregates of facts, the study of individual measurements lies outside the scope of statistics.
3. Statistical laws are not perfectly accurate: Statistics deals with such characteristics which are affected by multiplicity of causes and it is not possible to study the effect of these factors. Due to this limitation, the results obtained are not perfectly accurate but only an approximation.
4. Statistical results are only an average: Statistical results reveal only the average behavior. The Conclusions obtained statistically are not universally true but they are true only under certain conditions.
5. Statistics is only one of the methods of studying a problem: Statistical tools do not provide the best solution under all circumstances.
6. Statistics can be misused: The greatest limitation of statistics is that they are liable to be misused. The data placed to an inexperienced person may reveal wrong results. Only persons having fundamental knowledge of statistical methods can handle the data properly.