Introduction to the Importance of Statistics
Statistics is used as a tool to make appropriate decisions in the face of uncertainty. We all apply statistical concepts in our daily life either we are educated or uneducated. Therefore the importance of Statistics cannot be ignored.
Table of Contents
The information collected in the form of data (observation) from any field/discipline will almost always involve some sort of variability or uncertainty, so this subject has applications in almost all fields of research. The researchers use statistics in the analysis, interpretation, and communication of their research findings.
Some examples of the questions which statistics might help to answer with appropriate data are:
- How much better yield of wheat do we get if we use a new fertilizer as opposed to a commonly used fertilizer?
- Does the company’s sales are likely to increase in the next year as compared to the previous?
- What dose of insecticide is used successfully to monitor an insect population?
- What is the likely weather in the coming season?
Application of Statistics
Statistical techniques being powerful tools for analyzing numerical data are used in almost every branch of learning. Statistics plays a vital role in every field of human activity. Statistics has an important role in determining the existing position of per capita income, unemployment, population growth rate, housing, schooling medical facilities, etc in a country. Now statistics holds a central position in almost every field like Industry, Commerce, Biological and Physical sciences, Genetics, Agronomy, Anthropometry, Astronomy, Geology, Psychology, Sociology, etc are the main areas where statistical techniques have been developed and are being used increasingly.
Statistics has its application in almost every field where research is carried out and findings are reported. Application of statistics (by keeping in view the importance of statistics) in different fields as follows:
Social Sciences
In social sciences, one of the major objectives is to establish a relationship that exists between certain variables. This end is achieved through postulating hypothesis and their testing by using different statistical techniques. Most of the areas of our economy can be studied by econometric models because these help in forecasting and forecasts are important for future planning.
Plant Sciences
The most important aspect of statistics in plant sciences is its role in the efficient planning of experiments and drawing valid conclusions. A technique in statistics known as “Design of Experiments” helps introduce new varieties. Optimum plot sizes can be worked out for different crops like wheat, cotton, sugarcane, and others under different environmental conditions using statistical techniques.
Physical Sciences
The application of statistics in physical sciences is widely accepted. The researchers use these methods in the analysis, interpretation, and communication of their research findings, linear and nonlinear regression models are used to establish cause and effect relationships between different variables, and also these days computers have facilitated experimentation and it is possible to simulate the process rather than experimentation.
Medical Sciences
The interest may be in the effectiveness of new drugs, the effect of environmental factors, heritability, standardization of various records, and other related problems. Statistics come to the rescue. It helps to plan the next investigation to get trustworthy information from the limited resources. It also helps to analyze the current data and integrate the information with that previously existing.
How statistics is used by banks, insurance companies, Business and economic planning and administration, Accounting and controlling of events, Construction Companies, Politicians
Banks
Banks are a very important economic part of a country. They do their work on the guess that all the depositors do not take their money on the same day. Bankers use probability theory to approximate the deposits and claims to take out their money.
Insurance Companies
Insurance companies play an important role in increasing economic progress. These companies collect payment from the people. They approximate the death rate, accident rate, and average expected life of people from the life tables. The payment per month is decided on these rates.
Business
Business planning for the future is very important such as the price, quality, quantity, demand, etc of a particular product. Businessmen can make correct decisions about the location of the business, marketing of the products, financial resources, etc. Statistics helps a businessman to plan production according to the taste of the customers, the quality of the products can also be checked more efficiently by using statistical methods
The relationship between supply and demand is a very important topic of everyday life. The changes in prices and demands are studied by index numbers. The relation between supply and demand is determined by correlation and regression.
Economic Planning
Economic planning for the future is a very important problem for economists. For example (i) opening of new educational institutions such as schools, and colleges, revision of pay scales of employees, construction of new hospitals, and preparation of government budgets, etc. all these require estimates at some future time which is called forecasting which is done by regression analysis and the different sources of earning, planning of projects, forecasting of economic trends are administered by the use of various statistical techniques.
Accounting and Controlling of Events
All the events in the world are recorded, for example, births, deaths, imports, exports, and crops grown by the farmer etc. These are recorded as statistical data and analyzed to make better policies for the betterment of the nation.
Administrator
An administrator whether in the public or private sector leans on statistical data to provide a factual basis for appropriate decisions.
Politician
A politician uses statistical advantageously to lend support and credence to his argument while elucidating the problems he handles.
Construction Companies
All kinds of construction companies start and run their programs after making judgments about the total cost of the project (job, work). To guess the expenditure a very important statistical technique of estimation is used.
Biology
In biology correlation and regression are used for analysis of hereditary relations. To classify the organization into different classes according to their age, height, weight, hair color, eyebrow color, etc. the rules of classification are tabulation of statistics are used.