Economics in statistics

1. 11/2/2019 ASSIGNMENT
OF STATISTICS
SUBMITTED BY: 2K18/ECO/69 (LARAIB KHAN)
TOPIC:BRIEFLY EXPLAIN ECONOMICS IN STATISTICS
SUBMITTED TO:SIR SIKANDAR SOOMRO
SUBMITTED BY:LARAIB KHAN
SUBJECT:ECONOMIC STATISTICS
ROLL NO:2K18/ECO/69

2. SUBMITTED BY: 2K18/ECO/69 (LARAIB KHAN) 1
OUTLINES
 Introduction
 Definition
 Explanation
 Statistics
 Statistics for Economics (The Tools)
 Characteristics of Statistics
 Limitation of Statistics for Economics
 Application of Statistics for Economics
 Conclusion
 Reference

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INTRODUCTION
Economic statistics concerns with the collection, processing, compilation,
dissemination, and analysis of economic data. It is also common to call the data
themselves 'economic statistics', but for this usage see economic data. The data of
concern to economic statistics may include those of an economy of region,
country, or group of countries.
Economic statistics may also refer to a subtopic of official statistics for data
produced by official organizations (e.g. national statistical services,
intergovernmental organizations such as United Nations, European
Union or OECD, central banks, ministries, etc.). Analyses within economic
statistics both make use of and provide the empirical data needed in economic
research, whether descriptive or econometric.
DEFINITION
”The branch of statistical science that studies the quantitative aspect of
economic processes and phenomena in the national economy in conjunction with
their qualitative aspect it also studies the national economy as an integrated whole
(industrial, agriculture, labor etc.)”
EXPLANATION
In any economy, the existence of limited resources along with unlimited
wants results in the need to make choices. In this unit, we introduce concepts of
opportunity costs and trade-offs, and illustrate these concepts by using the
production possibilities curve.
We then consider of how different types of economies determine which
goods and services to whom to distribute them. It also increase the total output of
goods and services.
STATISTICS
Historically speaking, Statistics is something which has been changing
forever. It is not at all static just like other sciences. Kings and ancient rulers used
the following lines to refer to statistics: “The science of kings, political and science
of statecraft. “Now when we come upon defining statistics, many notable
economists and thinkers have defined it. For E.g. AI Bowley defined it as -:

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“The science of Averages” or “The science of Counting” Now both these
definitions although put forward the basic essence of statistics, but statistics is not
just limited to counting or finding average. There are many other various other
components of statistics like coefficient or index numbers, etc. Various economists
define statistics in singular and plural sense differently.
Modern statistics comprises of both these terms. Singularly, statistics is a
store of date and in plural sense, it includes activities involved in collection of
numerical data like census or surveys. Thus, at this standpoint we can provide a
comprehensive definition of statistics comprising both its plural and singular
meanings:
“Statistics are the numerical statement of facts capable of analysis and
interpretation and the science of statistics is the study of the principles and the
methods applied in collecting, presenting, analysis and interpreting the numerical
data in any field of inquiry.”
STATISTICS FOR ECONOMICS: THE TOOLS
Each stage of statistical study involves the use of certain standard techniques
or methods. These are known as statistical tools. For example to collect data we
have tools like census or sampling method or to organize data we may use a
frequency array or even a tally bar table. The various stages of statistical study and
their corresponding statistical tools have been given in the table below, which will
help explain the importance of statistics for economics.
STAGES STATISTICAL
STUDY
STATISTICALTOOLS
Stage 1 Collection of Data Census or Sample Techniques
Stage 2 Organisation of Data Array and Tally Bars
Stage 3 Presentation of Data Tables, Graphs and Diagrams
Stage 4 Analysis of Data Percentages, Averages, Correlation and
Regression Coefficients
Stage 5 Interpretation of Data Magnitude of Percentages, Averages, Degree

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KINDS OF STATISTICS:
Statistics is of two types:
1. Descriptive Statistics: Example- Industrial statistics, population statistics,
trade statistics, etc. Businessmen make use of descriptive statistics in
presenting their annual reports, final accounts, and bank statements.
2. Inferential Statistics: Example- Supposewe want to have an idea about
the percentage of the illiterate population of our country. We take a sample
from the population and find the proportionof illiterate individuals in the
sample. With the help of probability, this sample proportion enables us to
make some inferences about the population proportion. This study belongs
to inferential statistics.
CHARACTERISTICS OF STATISTICS:
The following are some of the chief features of statistics:
 Statistics are aggregatesoffacts. Basically a single number is not data but
only aggregate numbers comprise statistics since from them only meaningful
conclusions can be drawn.
 Statistics are numerically expressed. Qualities like ‘Rich’ or ‘Poor’ are not
parts of this science but numerical facts like income of 20,000 p.m. are
statistics.
 Statistics are affectedto a marked extent by multiplicity of
causes. Statistics is affected by multiple factors and not only one.
 Statistics are enumerated or estimated according to a reasonable
standard of accuracy.

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 Statistics are collectedfor a predetermined purpose. There is always a
reason for collection of data. This may be a specified field of study or
project for example.
 Statistics are collectedin a systematic manner. Statistics need to be
gathered properly. Only then correct conclusions can be made.
 Statistics must be comparable to eachother. Statistics involves items
placed in relation to each other, hence making comparability one of its chief
feature.
In short, as an avid learner one can conclude from this section that “All Statistics is
numerical data but all numerical data cannot be called statistics”
LIMITATION OF STATISTICS FOR ECONOMICS:
The important limitations of statistics are:
(1) Statistics laws are true on average. Statistics are aggregates of facts, so a single
observation is not a statistic. Statistics deal with groups and aggregates only.
(2) Statistical methods are best applicable to quantitative data.
(3) Statistics cannot be applied to heterogeneous data.
(4) If sufficient care is not exercised in collecting, analysing and interpreting the
data, statistical results might be misleading.
(5) Only a person who has an expert knowledge of statistics can handle statistical
data efficiently.
(6) Some errors are possible in statistical decisions. In particular, inferential
statistics involves certain errors. We do not know whether an error has been
committed or not
(7) It is study of numerical facts only. There is no room for qualitative elements.
(8) It only studies aggregates.
APPLICATION OF STATISTICS FOR ECONOMICS:
Statistics is efficiently and effectively utilized in various fields. Let’s begin
with a known field i.e. ECONOMICS. In this statistics facilitates inter-sectoral and
inter-temporal comparisons along with help in economic forecasting. Apart from

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this various economic theories like Demand-Supply, etc. are all verified through
actual statistics.
Next let’s take BUSINESS. Statistics helps businessmen to plan production
according to the taste of the customers, and the quality of the products can also be
checked more efficiently by using statistical methods. Thus, it can be seen that all
business activities are based on statistical information. Businessmen can make
correct decisions about the location of business, marketing of the products,
financial resources, etc.
Another notable field is BANKING. Bankers use statistical approaches
based on probability to estimate the number of deposits and their claims for a
certain day. This enables smooth functioning in their daily operations.
Other notable areas of common application of statistics for economics are:
 Accounting and Auditing
 Govt. Administration or Formulation of Policies
 Social Sciences
 Mathematics
Thus hereby we can summarize the following uses of Statistics for economics:
(1) Statistics helps in providing a better understanding and exact description of a
phenomenon of nature.
(2) Statistics helps in the proper and efficient planning of a statistical inquiry in
any field of study.
(3) Statistics helps in collecting appropriate quantitative data.
(4) Statistics helps in presenting complex data in a suitable tabular, diagrammatic
and graphic form for easy and clear comprehension of the data.
(5) Statistics helps in understanding the nature and pattern of variability of a
phenomenon through quantitative observations.
(6) Statistics helps in drawing valid inferences, along with a measure of their
reliability about the population parameters from the sample data

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At the end of this discussion here are some important terms and their definitions to
always remember.
Constant: A quantity which can assume only one value. E.g. e=2.71828……
 Variable: A quantity which can change its value and does not have a fixed
value. E.g. Income, Temperature or High SchoolAlgebra
 Qualitative Variable: A characteristic which varies only in quality from
one individual to another is called a qualitative variable. It cannot be
measured. For example: Beauty, marital status, rich, poor, scent, etc.
CONCLUSION
It can be conclude from the topic is that the statistics is the backbone of each
and every quantitative based organization and it make it economical in each steps
to collect more and more information about the interest of both the owner and
costumers .It can also be concluded that all statistical data is numerical data but all
numerical data may not be called statistics. Descriptive statistics is economical for
owner and inferential statistics reduce the cost of survey of population or sample of
project e.g.polio, disease or any problem in the region or are to be observed. Along
the reduction of cost and forecasting it also save the time.

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REFERENCES
 http:// encyclopedia2.the- freedictionay com/Econmics+statistics
 Google
 Wikipedia
 Applied economics: Thinking Beyond stage one book by Thomas Sowell