Class 11 Statistics
Economics is the study of how people and society choose to
employ scarce resources that could have alternative uses in
Economics order to produce various commodities that satisfy their
wants and to distribute them for consumption among
various persons and groups in society.
A consumer is one who consumes goods and services for the
Consumer
satisfaction of his wants.
Consumption is the process of using up the utility value of
goods and services for the direct satisfaction of our wants.
Consumption
Utility value of goods means inherent capacity of goods and
services to satisfy human wants.
A producer is one who produces and/or sells goods and
Producer
services for the generation of income.
Production is the process of converting raw materials into
Production useful things. Things become useful as they acquire utility
value in the process of production.
It is that part of income which is not consumed. It is an act of
Saving
abstinence from consumption.
It is expenditure by the producers on the purchase of such
Investment
assets which help to generate income.
Economic activity means that activity which is related to the
Economic
use of scarce resources for the satisfaction of unlimited
Activity human wants.
It is the problem of choice (or the problem of allocating scare
Economic
resources to alternative uses) arising on account of the fact
Problem that resources are scare and these have alternative uses.
Three Distinct Components of Economics
1) Consumption 2) Production 3) Distribution
Consumption is that Production is the Distribution of income
economic activity which process of converting refers to the
is concerned with the raw materials into distribution of GDP
(gross domestic
use of goods and useful things. Things
product) among the
services for the direct become useful as they owners of the factors of
satisfaction of acquire utility value in production (land,
individual and collective the process of labour, capital and
wants. production. entrepreneurship).
Statistics The systematic treatment of
quantitative expression is known
as „Statistics‟.
Statistics can be defined in two ways
In a plural In a singular
sense sense
Meaning of
Statistics in the
In its plural sense, statistics refers to information in
Plural Sense
terms of numbers or numerical data, such as
population statistics, employment statistics,
statistics concerning public expenditure, etc.
However, any numerical information is not
statistics.
Example : Ram gets Rs 100 per month as pocket
allowance is not statistics (it is neither an aggregate
nor an average) whereas average pocket allowance
of the students of Class X is Rs 100 per month, or
there are 80 students in class XI compared to just 8
in class XII of your school are statistics.
Features of statistics in the plural sense or as numerical data
Aggregate of Facts
A single number does not constitute statistics, it is the group of observations.
For example : “pocket expense of Anil during a month is Rs 50” is not statistics. But “pocket expenses of
Anil, Prakash, Sunil and Suresh during a month are Rs 50, 55, 80 and 70, respectively” is statistics.
Numerically Expressed
Qualitative statements are not statistics unless they are supported by numbers.
For instance, to say, Irfan Pathan is tall and Sachin is short, has no statistical sense.
However, if it is stated that the height of Irfan Pathan is 6 ft. and 2 inches and
that of Sachin is 5 ft. and 4 inches, then these numerals will be called statistics.
Affected by Multiplicity of Causes
Statistics are not affected by any single factor, but are generally not isolated facts they are dependent
on, or influenced by several phenomena, e.g. electricity bills are affected by consumption and rate of
electricity.
Reasonable Accuracy
A reasonable degree of accuracy must be kept in view while collecting
statistical data. This accuracy depends on the purpose of the
investigation, its nature, size and available resources.
Pre-determined Purpose
Statistics are collected with some pre-determined objective. Any information collected
without any definite purpose will only be a numerical value and not statistics.
Collected Systematically
Statistics should be collected in a systematic manner. Before collecting them, a plan must be
prepared. No conclusion can be drawn from statistics collected in haphazard manner.
In short, it is concluded that all numerical data cannot be
called statistics but all statistics are called numerical data.
Meaning of
Statistics in a
Singular Sense In the singular sense, statistics
means the science of statistics
or statistical methods.
It refers to techniques or
methods relating to the
collection, classification,
presentation, analysis and
interpretation of quantitative
data.
Stages of Statistical Study
Studying statistics as a singular noun implies the
knowledge of various stages of statistical study.
These stages are :
In the first stage, we collect statistical data
Second, we organise the data in some systematic order
Third, we present the data in the form of graphs,
diagrams or tables
Fourth, we analyse the data in terms of averages or
percentages
Fifth, and finally, we interpret the data to find a
certain conclusion
Stage - V
Interpretation
Stage - IV of Data
Analysis of
Stage - III Data
Presentation
Stage - II of Data
Organization
Stage - I of Data
Collection of
Data
Statistical Tools
These refer to the methods or techniques used for the
collection, organisation and presentation of data, as
well as for the analysis and interpretation of data.
Stages of statistical study and the related statistical tools
Stages Statistical study Statistical tools
Stage I Collection of data Census or sample techniques
Stage II Organisation of data An array of data and tally bars
Stage III Presentation of data Tables, graphs and diagrams
Percentages, averages, correlation and regression
Stage IV Analysis of data
coefficients.
The magnitude of percentages, averages and the degree
Stage V Interpretation of data
of relationship between different economic variables.
Scope of Statistics are
Nature of Limitations of
Statistics Statistics
Subject Matter
of Statistics
Nature of
Statistics Statistics is both a science as well as an art.
As a science, statistics studies numerical data
scientifically or systematically.
As an art, statistics relates to quantitative
data to the real-life problems. By using
statistical data, we can analyse and
understand real-life problems much better
than otherwise.
Thus, the problem of unemployment in India
is more meaningfully analysed when the size
of unemployment is supported with
quantitative data.
Subject Matter of Statistics
The subject matter of statistics includes two components
Descriptive Statistics Inferential Statistics
Descriptive Statistics :
Descriptive statistics refers to those methods which are used for the collection,
presentation as well as analysis of data.
These methods relate to such estimations as „measurement of dispersion‟ (mean
deviation, standard deviation, etc.), „measurement of central tendencies‟ (mean,
median, mode), „measurement of correlation‟, etc.
Inferential Statistics :
Inferential statistics refers to all such methods by which conclusions are drawn
relating to the universe or population based on a given data.
Limitations of Statistics
1) Study of numerical facts only :
Statistics studies only such facts as can be expressed in numerical terms. It does not study
qualitative phenomena like honesty, friendship, wisdom, health, patriotism, justice, etc.
2) Study of Aggregates only :
Statistics studies only the aggregates of quantitative facts. It does not study statistical facts relating to any particular unit.
For example : It may be a statistical fact that your class teacher earns Rs 50,000 per month. But, as this fact relates to an
individual, it is not to be deemed as a subject matter of statistics.
3) Prone to misuse :
Misuse of statistics is very common. Statistics may be used to support a pre-drawn conclusion even when it is absolutely false.
It is usually said, “Statistics are like clay by which you can make a god or a devil, as you please.” Misuse of statistics is indeed its
greatest limitation.
4) Can be used only by experts :
Statistics can be used only by those persons who have special knowledge of statistical methods.
Those who are ignorant about these methods cannot make sensible use of statistics. In other words, statistical methods are most
dangerous tools in the hands of an inexpert.
5) Homogeneity of Data, an essential requirement :
To compare data, statistics must be uniform in quality. Data of diverse qualities and kinds cannot be compared.
For example : The production of food grains cannot be compared with the production of cloth as both are measured in different
units. Comparison is possible only if their value is considered and not the volume.
6) Without reference, results may prove to be wrong :
To understand the conclusions precisely, the circumstances and conditions under which these conclusions have been drawn must
be also studied.
Otherwise, they may prove to be wrong.
Importance of Statistics in Economies
Quantitative Expression of Economic Problems
Consider any economic problem, be it the problem of unemployment, the problem of price rise or the problem of shrinking exports.
The first task of economists is to understand its magnitude through its quantitative expression.
Working Out Cause & Effect Relationship
Economists try to find out the cause-and-effect relationship between different sets of data.
Thus, through their statistical studies, if the economists come to know that it is because of the decline
in demand that investment in the economy has tended to shrink, they can suggest the government
adopt such measures as would increase the level of demand in the economy.
Economic Forecasting
Statistics also helps to predict the future behaviour of phenomena such as market situation for the
future is predicted based on available statistics of past and present.
Economists might be interested in predicting the changes in one economic factor due to the changes in another factor.
Formulation of Policies
Many policies such as that of import, export, wages, production, etc., are formed based on statistics. Some laws such as Malthus‟
theory of population and Engel‟s law of family expenditure are based on statistics.
Economic Equilibrium
It is a state of balance for the producer or the consumer where the producer finds that his profits are maximum or where the
consumer finds that his satisfaction is maximum.
