INTRODUCTION TO STATISTICS

Adam Smith’s Definition-Wealth Definition

Adam Smith (1723-90) defined Economics as follows:“Economics is the science of wealth”. He is the author of the famous book ‘wealth of Nations ‘in 1976.He is known as the Father of Economics ,he was the first person who put all the economic ideas in a systematic way. It is only after Adam Smith, we study economics as a systematic scienceAlfred Marshall’s Definition –Welfare Definition

Alfred Marshall (1842-1924) wrote a book Principles of Economics in 1990.In it; he defined economics as “a study of mankind in the ordinary business of life”. An altered form of the definition is “Economics is a study of man’s actions in the ordinary business of life”.

Definitions of Economics

Lionel Robbins’ Definition –Scarcity Definition

“Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses”Robbins has given the above definition in his book ‘An Essay on the Nature and significance of Economic Science’.

Samuelson’s Definition-Modern Definition of Economics

“Economics is a social science concerned chiefly with the way society chooses to employ its resources, which have alternative uses, to produce goods and services for present and future consumption”

Main Divisions and Basic concepts of EconomicsThere are four main divisions of economics. They are Consumption, Production, Exchange and Distribution. In Modern times, economists add one more division and that is Public finance.ConsumptionThe economic activity by which individuals try to satisfy their needs and wants are called as consumption. The objectives of consumption are to satisfy needs and want whereas the consumer seeks satisfaction or utility.ProductionThe process of changing, by adding value, raw materials into finished goods is called production, in other words, production is a value adding process to the raw materials in order to make final products.i.e the process of employing scare resources to satisfy human needs is known as production.ExchangeGoods may be exchanged for goods or for money. If goods are exchanged for goods, we call it barter. Modern economy is a money economy .As goods are exchanged for money.DistributionWealth is produced by the combination of Land, Labour, Capital and organization, and it is distributed in the form of rent, wages, interest and profits.Public FinancePublic Finance deals with the economics of government .it studies mainly about income and expenditure of government.

STATISTICSIn plural sense, statistics refers to

quantative data, Statistics is the science of counting-Dr.A.L.Bowley

Statistics is the collection, presentation, analysis and interpretation of numerical data-Croxton and Cowden

CHARACTERISTICS OF STATISTICS Statistics are aggregates of facts Statistics are numerically expressed Statistics are affected to a marked

extent by multiplicity of causes Reasonable standards of accuracy in

enumeration, estimation or collection Statistics are collected in a systematic

manner Statistics are collected for

predetermined purpose

CHARACTERISTICS OF STATISTIC IN SINGULAR SENSE Collection of data Classification of data Presentation of data Analysis of data Interpretation of data

SUBJECT MATTER OF STATISTICS Statistical method Applied statistics Descriptive Scientific

SCIENCE \ ART It is a systemized body of knowledge Its rules and applications are universal. It establishes relationship between

cause and effect It helps in effective forecasting Its method are in order and serialwise Large degree of skills and experience Effective decision making

SCOPE AND IMPORTANCE OF STATISTICS Useful to bankers Useful to insurance company Useful to railways and other transport

agencies Useful to business Useful to economists Useful to planning

FUNCTIONS Presentation of facts Simplification of complexities Facilitating comparisons Facilitating the formulation of policies Widening of human knowledge Useful in testing the laws of other

sciences Facilitates the forecasting Establishment of correlation between

two facts

LIMITATION Statistics does not study individuals Statistics deals with quantitative facts Statistics is true only to its averages Statistics may lead to fallacious

conclusion Only experts can make use of statistics Homogeneity and uniformity is must

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