Statistics Introduction

Statistics is the science of collection, analysis, interpretation, and presentation of numerical data.
✔ Branch of Mathematics
✔ Used in Economics, Accounting, Finance, Management, Psychology, Sociology, Physics.

✔ Helps understand economic problems
✔ Identifies causes using data
✔ Assists in formulating policies to solve problems.

✔ Converts vague statements into exact data.
Example:
✅ “310 people died in earthquake” (precise)
❌ “Hundreds of people died” (vague).

✔ Uses numerical measures (mean, variance, standard deviation) to condense large data sets.
Example: Average income summarises all individual incomes.

✔ Price ↔ Demand
✔ Price ↔ Supply
✔ Income ↔ Consumption Expenditure
✔ Govt. Expenditure ↔ General Price Level

✔ Economists assume relationships and verify their validity using statistical techniques like hypothesis testing and regression.

✔ Predicts future changes in one factor due to changes in another.
✔ Example: Today’s investment ➔ Future national income
✔ Helps set production targets based on consumption forecasts.

C A S T P P
✔ Collection
✔ Analysis
✔ Summarisation
✔ Testing
✔ Prediction
✔ Policies