What is Statistics?

The word ‘statistics’ is defined by Croxton and Cowden as follows:-
“The collection, presentation, analysis and interpretation of the numerical data.”
This definition clearly points out four stages in a statistical investigation, namely:

  • Collection of data
  • Presentation of data
  • Analysis of data
  • Interpretation of data

In addition to this, one more stage i.e. organization of data is suggested


Business statistics is the science of good decision making in the face of uncertainty and is used in many disciplines such as financial analysis, econometrics, auditing, production and operations including services improvement, and marketing research..

1.2 Uses of Statistics

  • To present the data in a concise and definite form : Statistics helps in classifying and tabulating raw data for processing and further tabulation for end users.
  • To make it easy to understand complex and large data : This is done by presenting the data in the form of tables, graphs, diagrams etc., or by condensing the data with the help of means, dispersion etc.
  • For comparison: Tables, measures of means and dispersion can help in comparing different sets of data..
  • In forming policies: It helps in forming policies like a production schedule, based on the relevant sales figures. It is used in forecasting future demands.
  • Enlarging individual experiences: Complex problems can be well understood by statistics, as the conclusions drawn by an individual are more definite and precise than
    mere statements on facts.
  • In measuring the magnitude of a phenomenon:- Statistics has made it possible to count the population of a country, the industrial growth, the agricultural growth, the educational level (of course in numbers)

1.3 Limitations of Statistics

  • Statistics does not deal with individual measurements. Since statistics deals with aggregates of facts, it cannot be used to study the changes that have taken place in individual cases. For example, the wages earned by a single industry worker at any time, taken by itself is not a statistical datum. But the wages of workers of that industry can be used statistically. Similarly the marks obtained by Kamau of your class or the height of Atieno (also of your class) are not the subject matter of statistical study. But the average
    marks or the average height of your class has statistical relevance.
  • Statistics cannot be used to study qualitative phenomenon like morality, intelligence, beauty etc. as these cannot be quantified. However, it may be possible to analyze such
    problems statistically by expressing them numerically. For example we may study the intelligence of boys on the basis of the marks obtained by them in an examination.
  • Statistical results are true only on an average:- The conclusions obtained statistically are not universal truths. They are true only under certain conditions. This is because statistics as a science is less exact as compared to the natural science.
  • Statistical data, being approximations, are mathematically incorrect. Therefore, they can be used only if mathematical accuracy is not needed.
  • Statistics, being dependent on figures, can be manipulated and therefore can be used only when the authenticity of the figures has been proved beyond doubt..



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