CLASS XI

COMMERCE AND
HUMANITIES
STATISTIC
BOOK II
INTRODUCTION OF STATISTIC

CHAPTER 1
 Definition of Economics
According to Robbins
“ Economics is a science of choice. It deals with
how the resources of society should be allocated
to the satisfaction of different wants ”
 Definition of Economic Activities
An economic activity refers to the activity which
is related to the use of scare resources to satisfy
maximum human wants.
Economic Activities

Production Consumption Distribution

activity which relates to determination of
price of factor production ( land, labour,
capital, and enterprises)
 What is Statistics ?
Statistics means quantitative information or
quantification of the facts and findings .
Statistics can be defined in both singular sense and
plural sense
Definition of plural sense
In its plural sense, this is how statistics is defined by
different authors
“ Statistics are numerical statements of facts in any
department of enquiry placed in relation to each other”
- Bowley
“By Statistics we mean quantitative data affected to a
marked extent by multiplicity of causes” - Yule and Kendall
 Features or Characteristics of statistics in
the Plural sense
• Aggregate and facts: A single number does
not constitute Statistics.
• Numerically Expressed: Statistics are
expressed in terms of numbers. Qualitative
aspects like ‘small’ or ‘big’, ‘rich’ or ‘poor’ etc.
are not called Statistics
• Multiplicity of causes: Statistics are not
affected by any single factor; but are
influenced by many factors
 mutually related and comparable.
• Pre determined Objective : Statistics are
collected with some pre determined object.
Any information collected without any definite
objective will only be a numerical value and
not statistics.
 STATISTICS
CHAPTER 1
Part II

INTRODUCTION
 Definition of Statistics in Singular Sense

According to Croxton and Cowden,

“ Statistics may be defined as a science of collection,
presentation, analysis and interpretation of numerical
data “

The above definition of statistics covers the following statistical

methods:
1. Collection of data.
2. Organisation of data
3. Presentation of data
4. Analysis of data
5. Interpretation of data
 Functions Of Statistics
 Helps in Understanding the economic problem:
Statistics is an indispensable tool for an economist
that helps to understand an economic problem.
 Presentation of facts in definite form: Statistics
enables an economist to present economic facts in a
precise and definite form that helps in proper
comprehension of what is stated
 Statistics helps in condensing mass data into a few
numerical measures: The numerical measures help to
summarise data. Statistics summarises and present
meaningful overall information about the mass of data
 Establishes relation between factors: Statistics is
used in finding relationships between different
economic factors. An economist may be interested in
finding out, what happens to the demand of
commodity when its price increases or decreases
 Helps in formulating plans and policies: Sometimes,
formulation of plans and policies requires the
knowledge of future trends. For example, an
economic planner has to decide in 2005 how much
the economy should produce in 2010
 Importance of Statistics
1. Statistics in economics:
a). Statistics in Consumption. The data of consumption are
useful and helpful I planning their budget and improve their
standard of living
b). Statistics in Production. The comparative study of the
production processes is done with the help of statistics. The
statistics of production are very useful and helpful for adjustment
of demand and supply
c). Statistics in Distribution. Statistical methods are used in
solving the problem of distribution of national income among
various factor of production i.e. land, labour, capital and
entrepreneur
planning is inconceivable.”
3. Statistics in business. Statistical tool plays a very
important role in major business activities. The producer
depends upon market demand and the market research is
based on statistics. The trader depends heavily on
methods of statistical analysis to study market.
 Limitations of Statistics
• Statistics does not study individuals: Statistics
studies aggregate of facts
Serial No. Wages
1 750
2 650
3 250
4 850
5 700

Total 3200
• Without reference, statistical results may
prove to be wrong: In order to understand the
statistical results clearly, it is also important to study
the conditions under which these conclusion are
draw, otherwise the result may prove wrong

Years Profits

Firm A Firm B Firm A

2007 4000 8000 6000

2008 6000 6000 6000
2009 8000 4000 6000

Total Profit
Average profit 18000 18000 18000
6000 6000 6000
• Statistics deals with numerical facts only: Statistics
are numerically expressed. Statistics does not study
qualitative aspects. It can be used for measuring
quantitative data only
• Statistics are truly only on an average: Statistics
laws are not exact like the laws of physical sciences like
physics, chemistry, etc. Statistical result are true only on
an average
• Statistics needs special expertise: Statistics can be
used by experts only. According to Yule and Kendall-
Statistical methods are most dangerous tools in the hands
of inexpert. It requires special knowledge to use statistical
tool otherwise result may be wrong or misleading
• Homogeneity of data is essential: It is essential
that data must have the quality of uniformity and
homogeneity to make data comparable
• Prone to misuse: Statistics can be misused. If
statistical tools are not be true. The results may be
manipulated according to suitability of ones own
interest.
 Chapter-2
Part 1

Collection of Data
 Sources of Data
There are different sources of ‘data’

Sources of Data

Internal External

Primary Secondary
 Internal source of Data
• Internal data may be available in the organisation
about sales, production, interest, profit, dividends
etc.
• Such data are compiled and used for future planning

External Sources of Data

• Information collected from outside organisation and
institutions is called external data.
• External data can be obtained from primary source
or secondary source
 Primary Source of Data

Primary source of data refers to collection of data from its

source of origin. It offers first hand quantitative
information relating to statistical study. It involves lot of
time and cost.

Secondary Source of Data

Secondary source of data refers to obtaining the relevant
statistical information from an institution which
possesses such information. Thus, secondary source
implies that the required statistical information already
exits.
 Primary Data

Data collected by the investigator for his own purpose, for

the first time, from beginning to end, are called primary data.

Secondary Data

Secondary data are those which are already in existence and

which have been collected, for some purpose other than
answering the question in hand. These are collected from
the secondary source. These can be obtained from published
sources such as government reports.
Primary data and Secondary data
Primary Data
• Data collected by the
investigator for his own
purpose, for the first time,
from beginning to end, are
called primary data
• These are collected from
primary source
Secondary Data
• Data which are already in
existence, and which have
been collected for some
other purpose than
answering the question in
hand are called secondary
data
• These are collected from
secondary source
 Primary data
• These are original as these are
collected from the source of
origin. These are first hand
data.
• These are costlier in terms of
time, money and efforts
involved
• Since these are collected for
the first time, hence these are
not available in form of
published/ unpublished
reports.
• Since, Primary data are always
related to a specific objective
of the investigator, these do
not need adjustment for the
concerned study
Secondary data
• These are not original as these
are already existence. These
are second hand data.
• These are less costlier in terms of
time, money and efforts involved
• These are available in the form
of published/ unpublished
reports.
• Since, Secondary data have
already been collected for
some other purpose, these
data need to be adjusted to
suit the objective of study in
hand
 Methods of collection of data
Primary Data
Direct Personal Investigation
Indirect oral Investigation
Information from local
Sources or correspondents
Information through filling
Questionnaire and schedule
i). Mailing method
ii). Enumerator’s method
Telephonic Interviews
Collection of Data
Secondary Data
Published Sources Unpublished sources
Government Publications
Publications of internal bodies
Semi-officials publications
Reports of committees and commissions
Private Publications:
(i). Journals and newspaper (ii). Research Institutions
(iii). Professionals Trade bodies (iv). Articles
 Methods of Collection of Primary Data
Direct Personal Investigation ( Personal
Interview)
The direct personal investigation is the method by
which data are personally collected by the investigator
from the informants.
Suitability
Direct Personal Investigation is suitable when:
1. Area of enquiry is limited.
2. Maximum degree of accuracy is needed.
3. Direct contact with informants is necessary.
4. Secrecy of information is significant.
 Merits
1. Accuracy: Data collected by this method are fairly
accurate as information is collected from the source
of origin.
2. Originality: It provides first hand information, so
original data are collected.
3. Reliability: Since information is personally
collected by the investigator and the enquiry is
intensive, data collected are reliable.
4. Uniformity: There is uniformity in data collected
by investigator personally, which facilitates
comparison
 Demerits
1. Difficult to study vast areas: This method cannot
be used if the field of enquiry is large. It can be
used only when field of enquiry is limited.
2. Costly: This method is costly. It is expensive in
terms of time, money and efforts involved.
3. Personal Bias: The data can lose credibility and
reliability if the investigator is biased Personal bias
can give wrong results.
4. Complex: This method is lengthy and complex as
it requires investigators to be trained in
conducting personal interviews with informants.
 Indirect Oral Investigation
Indirect oral investigation is the method by which
information is obtained orally from people who are
expected to possess the necessary information and not
from the persons regarding whom the information is
needed.
Suitability
1. This field of enquiry is large.
2. Direct contact with concerned informants cannot be
established.
3. Concerned informants are incapable of providing
information due to illiteracy or ignorance.
4. Enquiry is complex in nature that only specialised
people can give details
 Merits
1. Covers wide areas: This method covers wide areas of
investigation.
2. Cost effective: Since it saves labour, time and money,
it is less expensive than Direct Personal Investigation
3. Simple: This method of data collection is relatively
simple and convenient.
4. Expert opinion: Since investigator can seek expert
opinion, data collected are reliable
Demerits
5. Lack of Accuracy: As the information is obtained
from the third party and not from the person directly
concerned, there is possibility of not getting true
information.
2. Personal Bias: There is possibility of
information being biased as various
evidences obtained may sometimes be
exaggerated by the witness.
3. Doubtful Conclusions: The conclusions may
be doubtful due to carelessness or lack of
information with the witnesses.
 Difference between direct Personal
Investigation and Indirect Oral Investigation

Direct Personal Investigation Indirect Oral Investigation

• This method is suitable for
smaller areas
• The data collected are
original in nature.
• It is more costlier in term of
time, money and efforts.
• This method is more reliable
as informtaion is collected
directly from the informants
• This method is suitable for
wider areas
• This method lacks originality
as witnesses provide
information
• It is less costlier in term of
time, money and efforts
• This method is less reliable as
information is collected from
the witnessess
 3. Information From Local Source or
correspondents
Under this method local persons or correspondents are
appointed in different parts of the areas to be
investigated. They collect information in their own way
and present it to the investigator.
SUITABILITY
This method is suitable when
• Area of enquiry is large
• High degree of accuracy in data is not necessary
• Regular and continuous data are required
• Information is required by radio, newspaper, TV, etc.
 MERITS
• Wide Coverage: It can cover a wide areas
under investigation.
• Inexpensive: This method is comparatively
cheaper in terms of time, money and efforts
involved, hence it is economical.
• Regular Information: Local sources or
correspondents supply regular information, so
continuity remains maintained.
• Suitable for Social Purpose: This method is
suitable for special investigations
 DEMERITS

1. LACK OF ACCURACY.-This method gives rough and approximate

results, so the data collected are not very accurate.

2. NO ORIGINALITY.- Original data are not obtained due to lack of

personal contact with respondent

3. BIASED.- The data collected form correspondents may suffer

from personal biasness of the correspondent and may not be reliable.

4. TIME CONSUMING,- there may be delay in the collection of data

by this method if it involve lot of time to collect data by corespondent
 4. INFORMATION THROUGH
QUESTIONNARIES AND SCHEDULE
There are two ways of collecting data on the
basis of questionnaire:
1. Mailing method
2. Enumerator’s method
 MAILING METHOD

IN THIS method a questionnaire prepared according

to the objective of study is mailed to the informants,
with the request to answer and return them within
a specified time period. An assurance is given that
the answers will be confidential.
 SUITABILITY
1. AREA UNDER INVESTIGATION IS VERY WIDE.

2. INFORMANTS ARE LITERATE AND

EDUCATED.

3. WHEN ORIGINAL FIRST HAND DATA ARE

REQUIRED.

4. WHEN IT IS COMPULSORU BY LAW TO FILL

QUESTIONNAIRE.
 MERITS
• ECONOMICAL :- It is economical in terms of tome, money ,
and efforts involved.
• WIDE COVERAGE:- large fields can be studied under this
method .This method is convient when informants are
spread over a vast geographical area to be investigated.
• ORIGINAL AND RELIABLE:- since this method provide first
hand information, it is original in nature and hence
reliable.
• FREE FROM BIAS:- this method I free from bias of the
investigator as information is given by informants
themselves.
 DEMERIT
• LACK OF INTREST:- lack of intrest among informants limit
the use of this method as they may fail to send back the
questionnaire or may send it incomplete.
• LIMITED USE:- This method can be put to use only when
informants are educated.
• LACK OF ACCURACY:- informants may misinterpret or may
not understand the questions properly . So there is a
possibility of getting wrong results.
• INFLEXIBLE:- Since questions cannot be altered according
to the suitability of the informants, this method is not
flexible.
(iv) Information Through Questionnaries and Schedules

• There are two ways of collecting information on the basis of

questionnaire

(a) Mailing Method :-

Under this method questionnaires are mailed to the informants.

The method is most suited when

• The area of the study is very wide.

• The informants are educated.
 Enumerator’s Methods
• Enumerator’s Methods Under this Method
enumerator himself fills the schedules after seeking
information from the informants.

This method is mostly used/suitable when

• field of investigation is large.
• the investigation need specialised and skilled
investigation.
• the investigators are well versed in the local language
and cultural norms of the informants.
 MERITS
• WIDE COVERAGE
• PERSONAL CONTACT
• RELABLE DATA/ACCURATE
• COMPLETE INFORMATION
 DEMERITS
• EXPANSIVE
• TIME CONSUMING
• NON AVAILABILITY OF SKILLED ENUMERATORS
• BIASED
• NOT SUITABLE FOR PRIVAT INVESTIGATION
 Collection of Secondary Data
There are two main sources of secondary
data
• Published sources

• Unpublished sources

(
 Published Sources
Some of the published source of secondary data are

• Government publication
• Semi-government publication
• Reports of committees and commissions
• Publications of trade associations
• Publication of research institutions
• Journals and papers
• Publication of research scholars
• International publication
 UNPUBLISHED SOURCES

• These data are collected by the government

organisations and others, generally for their
self use or office record.
 FOLLOWING POINTS MUST BE KEPT IN
MIND

• In order to assess the reliability, suitability and

adequacy of the data, the following points
must be kept in mind
• Ability of the collecting organisation
• Objective and scope
• Method of collection
 CHAPTER 3

• METHODS OF STATISTICAL
ENQUIRY: (CENSUS AND SAMPLE METHODS)
PART 1
 Census Method

Census method is that method in which data are

collected covering every item of the universe or
population relating to the problem under
investigation.

Merits and demerits of this method are given

follows
CENSUS METHOD
 Merits

• Reliable and accurate

• Less biased
• Extensive information
• Study of diverse characteristic
• Study of complex investigation
• Indirect investigation
 DEMERITS

• Costly
• Large manpower
• Not suitable for large investigation
 SAMPLE METHOD

• It is that method in which data is collected about

the sample on a group of items taken from the
populations for examination and conclusions are
drawn on their basis.

Merits and demerits of this method are given below

•
 MERITS

• Economical
• Time saving
• Identification of error
• Large investigation
• Administrative convenience
• More scientific
 DEMERITS
• (Partial
• Wrong conclusions
• Difficulty in selecting representative sample
• Difficulty in framing a sample
• Specialised knowledge
 CHAPTER 3

• METHODS OF STATISTICAL
ENQUIRY: (CENSUS AND SAMPLE METHODS)
Topic : methods of sampling
PART 2
 METHODS OF SAMPLING
• RANDOM SAMLING
Random sampling is that method of sampling
in which each and every item of the universe has
equal chance of being selected in the sample.
Random sampling may be done in any of the
following ways
• Lottery method
• Tables of random number
PURPOSIVE OR DELIBERATE SAMPLING

• It is that method in which the investigator

himself makes the choice of the samples items
which in his opinion are the best
representative of the universe.
MERITS OF PURPOSIVE SAMPLING
1. FLEXIBLE: Since purposive sampling allows
inclusion of significant items in the sample,
this method is flexible in use.
2. FACILITATES PURPOSE OF STUDY: selection
of items for the sample can be done
deliberately to suit the objective of study.
3. SIMPLE: This method ensures simplicity in
the process of sample selection as it is based
on opinion of the investigator.
 DEMERITS
1. BIASED: this method suffer from personal bias of
the investigator while selecting items from the
universe as it is left to the choice factor.
2. NOT RELIABLE : This method suffers from personal
bias of the investigator , the samples thus selected
may not be reliable.
3. INACCURATE: This method gives inaccurate results
as samples depend on the whims of the
investigator. If the investigator is not competent
eough, one may get INACCURATE RESULTS.
 STRATIFIED OR MIXED SAMPLING
• Stratified or Mixed Sampling According to
this method of sampling population is
divided into different strata having different
characteristics and some of the items are
selected from each strata, so the entire
population gets represented.
 MERITS
1. COVER DIVERSE CHARACTERISTICS: This method is
suitable where items in the universe have diverse
characteristic.
2. REPRESENTIVE.: more representive samples are obtained
because the universe is divide into strara and every
stratum gets a representative in the sample.
3. Accuracy: this method ensure accuracy as the variation
among different strata reduces to a great extent.
4. Administrative convenience : division of universe into
certain homogeneous strara and sub-strata ensures
administrative convenience.
 DEMERITS
1. LIMITED SCOPE: this method has a limited scope as it
requires complete knowledge regarding diverse characteristic
of the population.
2. BIASED: there may be biasness in the part of investigator
while classifying different items of the universe into different
strata.
3. EXPENSIVE: if the stratified samples are distributed widely
geographically, then it becomes an expensive method of
sample collectiond
4. DIFFICULT IF SIZE OF POPULATION IS SMALL. If the size if the
universe is already small ,it becomes difficult to divide
The items into even smaller strata
THANK YOU
 CHAPTER 3

• METHODS OF STATISTICAL
ENQUIRY: (CENSUS AND SAMPLE METHODS)
Topic : methods of sampling
PART 3
 SYSTEMATIC SAMPLING

• Systematic Sampling According to this

methods, units of the population are
numerically, geographically and alphabetically
arranged. Every nth item of the numbered is
selected as a sample item.
 MERITS
• SIMPLE: This method is simple and convenient
to use as compared to other methods of
random sampling or stratified sampling.
• NOT BIASED: there exists no possibility of
personal bias by the investigator as every nth
items is selected as a samplesuming item.
• Less time consuming:
 DEMERITS
• Biased result in case of periodic features: the
result of a systematic sample can be very
misleading if there is periodicity in the data.
• Possible only when complete list is available
• unsuitable in case of large population;
 Quota Sampling
• Quota Sampling In this method, the
population is divided into different groups or
classes according to different characteristics
of the population.
 MERITS
• Reliable result: if the investigator are skilled
and experienced , it gives more reliable and
dependable result
• Economical: the cost of preparing sample and
field work is very low.
 DEMERITS
• Personal prejudice : there is considweable risk
that a biased sample may be selected
according to the personal prejudice of the
investigator
• Not possible to estimate sample error: it is not
possible to estimate the sampling error and
the degree of accuracy achieved.
 CONVENIENCE SAMPLING
• CONVENIENCE SAMPLING: In this method,
sampling is done by the investigator in such a
manner that suits his convenience.
 MERITS
• ECONOMICAL: IT IS LESS EXPENSIVE AND LESS
TIME CONSUMING
• EASY COMMAND: the units of the sample are
easly located and contacted by the
investigators.
• Suitable for pilot surveys: it is often used for
making pilot studies in which questions are
pre tested and preliminary information is
obtained before finalizing the sample design .
 DEMERITS
• Lack of representation : the units of the
sample are prone to bias by their nature.
• Personal prejudice : convenience samples are
prone to bias by their nature.
• Unsatisfactory results: the results obtained
under this method are found to be
unsatisfactory and misleading.
 CHAPTER 3

• METHODS OF STATISTICAL
ENQUIRY: (CENSUS AND SAMPLE METHODS)
Topic : sampling error
PART 4
 Statistical error
The difference between the collected data and
actual value of facts is termed as statistical error.
 TYPES OF STATISTICAL ERRORS

1. SAMPLING ERRORS
2. NON SAMPLING
 SAMPLING ERRORS
• SAMPLING ERRORS
SAMPLING ERRORS refers to the difference
between the average of actul values of the given
variables and average of sample estimates which
are selected from values of the given variables
 EXAMPLE
• Consider a case of income of 5 farmers in
manipur .there income are 500Rs ,550, 600,
650, and 700. The average income would be 600
• Suppose we select a sample of two person out
of 5 as 500 and 600 . The average income now
would be (500 +600) /2 = Rs 550
• Here the sampling error is 600 ( average of
actual values) – Rs 550 ( average of sample
estimate) = Rs 50
 Non sampling
• The errors which arise at the stages of
ascertainment (acquiring ,organising ) and
analysis of data are called non sampling
errors.
• These are more serious than sampling errors
because where sampling errors can be
minimised by taking a larger sample, non
sampling errors can not be minimised even by
taking a larger sample.
 THANK
YOUSSS