Introduction to Statistics

Definition of Statistics
The word Statistics is used in two senses. 1st, in the plural sense: as merely collection of some data or figures like agricultural statistics, banking statistics, income-tax statistics, sales-tax statistic, etc. and the other in the singular sense : as a subject like Economics, Mathematics etc. As a subject, Statistics may be defined as : The subject concerned with scientific method for collecting, summarizing, presenting and analyzing data as well as drawing conclusions or making predictions on the basis of such analysis

2 Branches of Statistics
Descriptive Statistics : This branch only seeks to describe and analyze any data Inferential Statistics : This branch deals with drawing conclusions about the population with the help of the analysis of a sample, drawn from it.

 It increases the field of mental vision just as the binoculars increases the field of physical vision Simplifies complex mass of data, and presents them in a form and manner that they become intelligible. Conversion of data into information, makes it more useful for decision making. Quantifies and measures uncertainty and variability and thereby helps in measuring risk and decisionmaking. Discovers past & emerging patterns in a data. Such analysis helps in forecasting. Helps in estimation & validating assumptions

Functions of Statistics

 It is applicable only to quantitative data. This cannot be used to study such events which cannot be expressed numerically. It is used to analyze only collective matters and not individual events. Statistical decisions are applicable only on the average and in long run. They may not hold in a particular case. Statistical methods, if not applied in the proper perspective of the collected data, may lead to false conclusions. Statistical data must be uniform, in the sense that they should be subject to a stable casual system. There should not be much change in the group of factors responsible for variation in the data

Limitations of Statistics

Applications of Statistics
Marketing : It is helpful in the marketing function of an enterprise through its enormous help in market research, choosing appropriate strategy for organizing and evaluation of advertising campaigns. Economics : It renders valuable assistance in the proper understanding of the economic problems and the formulation of economic policies.. Most economic phenomena and indicators can be quantified and dealt with statistically sound logic. Finance : All financial decisions are based on Expectations that is best analyzed with the help of the theory of probability and statistical technique.

 Insurance : Life insurance is essentially based on the concept of probability. The mortality table on which all life insurance are based, are basically the concept of probability carried over to human life expectancies. . This table predict how many people, alive at a given age, will die that year and each year thereafter. Operation : It plays a very useful role at the input stage of production through sampling inspection and inventory management. It is also important for supply chain management which encompasses the management of components, manufacturing and distribution of a manufactured item

Statistics & Computers

Statistics is the study of behaviour of numbers in certain distributions across a sample.

Computer science is mainly programming of application and design of system.

Their link primarily is due to the design of a system might need to handle a large sample (of customer, user, password, database). Or in application wise, you might need it to handle financial institution's application which often involves statistics in their calculation. Other than that, there are certain statistical software which makes the use of statistics much easier through computers.

Primary Data & Secondary Data

Primary data are those which are collected for a specific purpose directly from the field of enquiry and are original in nature. Such data are published by authorities who themselves are responsible for their collection Secondary data are such numerical information which have previously been collected by some agency for one purpose and are merely complied from that source for use in a different connection. In fact, data collected by someone when used by another or collected for one purpose when used for another, will be called as secondary data

Government Publications Registrar General of India- It is an office which generate demographic data. It includes details of gender, age, occupation etc. Central Statistical Organization- This organization publishes the national accounts statistics. It contains estimates of national income for several years, growth rate, and rate of major economic activities. Director General of Commercial Intelligence- This office operates from Kolkata. It gives information about foreign trade i.e. import and export. These figures are provided region-wise and country-wise. Ministry of Commerce and Industries- This ministry through the office of economic advisor provides information on wholesale price index. These indices may be related to a number of sectors like food, fuel, power, food grains etc.

 Planning Commission- It provides the basic statistics of Indian Economy. Reserve Bank of India- This provides information on Banking Savings and investment. RBI also prepares currency and finance reports. Labour Bureau- It provides information on skilled, unskilled, white collared jobs etc. National Sample Survey- This is done by the Ministry of Planning and it provides social, economic, demographic, industrial and agricultural statistics. Department of Economic Affairs- It conducts economic survey and it also generates information on income, consumption, expenditure, investment, savings and foreign trade. State Statistical Abstract- This gives information on various types of activities related to the state like commercial activities, education, occupation etc.

Non Government Publications- These includes publications of various industrial and trade associations, such as The Indian Cotton Mill Association Various chambers of commerce The Bombay Stock Exchange (it publishes a directory containing financial accounts, key profitability and other relevant matter) Various Associations of Press Media. Export Promotion Council. Confederation of Indian Industries ( CII ) Small Industries Development Board of India Different Mills like - Woolen mills, Textile mills etc

Central Tendency
It is the middle point of the distribution. It is also called the measures of location Curve A & B has the same central location

Dispersion
It is the spread of the data in a distribution, that is, the extent to which the observations are scattered. Here the curve with blue line is more dispersed than the curve with red line

Arithmetic Mean
Advantages Easy to calculate Very stable and reliable average Disadvantages It is highly affected by the presence of even a few extremely large or small observations

Median
Advantages Unlike mean, it is not affected by extreme values Unlike mean, it can be calculated for openended class intervals

Application of median
Half of the values in the data set lie below the median and half lie above the median. The median is the most commonly quoted figure used to measure property prices. The use of the median avoids the problem of the mean property price which is affected by a few expensive properties that are not representative of the general property market.

Mode
It is the value that is repeated most often in the data set. In other words, for a given set of observations, mode is that value which occurs with maximum frequency. Bimodal distribution is the distribution that has two modes. Advantages Not affected by extreme value Can be used for open-end class

Application of Mode
The mode of a set of data values is the value(s) that occurs most often. The mode has applications in printing. For example, it is important to print more of the most popular books; because printing different books in equal numbers would cause a shortage of some books and an oversupply of others. Likewise, the mode has applications in manufacturing. For example, it is important to manufacture more of the most popular shoes; because manufacturing different shoes in equal numbers would cause a shortage of some shoes and an oversupply of others.

Relation between Mean, Median & Mode

Mean-Mode = 3(Mean-Median)