with concrete examples, explain the role of statistics in economic analysis
Answers
Answer:
Generally, the subject matter of statistics deals with the quantification of data. It revolves around concrete figures to represent qualitative information. Simply, it is a collection of data. But that’s not all. As economics students, we need to learn about the techniques of dealing with a collection of data, tabulation, classification, and presentation of data.
Further, we need to learn about reduction and condensation of data. Lastly, we also need to gain insights into the techniques for analysis and interpretation of data.
Statistics in Economics: Introduction, Positives, Limitations, Examples
Statistics in a Plural Sense
We are concerned with statistics in economics in its plural sense. That is to say, statistics are numerical statements or quantitative data in scenarios placed in relation to each other. In simpler words, a way to identify a plural statistical statement is that there should be an aggregate for an entity that is placed in comparison with another entity. For example, an average Indian is expected to live for 65 years compared to a mere 57 in Bangladesh.
Features of Statistics in its Plural Sense
It is numerically expressed: Statistics in economics deals with numbers and is quantitative. Qualitative adjectives like rich, poor, tall etc. have no attached significance in the statistical universe.
Reasonably accurate: A statistical conclusion should be reasonably accurate which depends on the purpose of an investigation, its nature, size and available resources.
Can involve estimation: If the field of study is large, for example, the number of people attending a rally, then a fair bit of estimation can do the trick. However for small fields of study, take, for example, the number of students in each field of study in a college, exact number calculation is easy and essential.
Systematic collection of data: Collection of data should be done systematically, which means, accumulating just raw data without any information about its origin, purpose etc is not valid in the statistical universe.
Relative: Statistics in economics in its plural sense has the feature of comparability. This means that the same kind of data from different sources can be compared.
Multiple factors: Statistics is affected by a large number of factors and not just a single factor. For example rise in the price of a commodity is not because of a change in one factor but it is an effect of a large number of factors.
Aggregation: Statistics is a game of averages or aggregates. A number expressed for a single entity is no way related to statistics. For example, the height of a single student is not a statistical data but the average height of students in a class is.