Define “Statistics”. What are the functions of Statistics? Difference between Primary data and Secondary data.

Define “Statistics”. What are the functions of Statistics? Difference between Primary data and Secondary data.

Answer:

Definition of statistics:

According to Horace Secris, “Statistics may be defined as the aggregate of facts affected to a marked extent by multiplicity of causes, numerically expressed, enumerated or estimated according to a reasonable standard of accuracy, collected in a systematic manner, for a predetermined purpose and placed in relation to each other”.

Functions of Statistics

1.      Statistics simplifies mass data
·           Statistics is used in simplification of complex data.  Using statistical concepts, managers can make decisions more easily.
·           Statistical methods help in reducing the complexity of the data and consequently in the understanding of any huge mass of data.
For example: There are 10 students in a class from roll numbers 1 to 10 and their scores out of 10 marks in math as below:
1          2          3          4          5          6          7          8          9          10
9          8          7          9          8          5          6          7          8          7
To find out the average marks scored by the class, we will sum all the marks and divide by the total number of students. So the average score of the class is 74/10 = 7.4.
Statistic is about collection of data, organizing the data and presenting it. It helps raw data get converted to readable and comprehensible data.

2.      Statistics makes comparison easier
·           Statistics helps us to compare data collected from different sources.
·           Grand totals, measures of central tendency, measures of dispersion, graphs and diagrams, coefficient of correlation all provide ample scopes for comparison.
·           Visual representation of numerical data helps you to compare the data with less effort and can make effective decisions.

3.      Statistics brings out trends and tendencies in the data
·           After data is collected, it is easy to analyse the trend and tendencies in the data by using the various concepts of Statistics.

4.      Statistics brings out the hidden relations between variables
·           Statistical analysis helps in drawing inferences on data. Statistical analysis brings out the hidden relations between variables.

5.      Decision making power becomes easier
·           With the proper application of Statistics and statistical software packages on the collected data, managers can take effective decisions, which can increase the profits in a business.
 

The differences between primary and secondary data are listed below:

    Primary Data

•         Data is original and thus more accurate and reliable.
•         Gathering data is expensive.
•         Data is not easily accessible.
•         Most of the data is homogeneous.
•         Collection of data requires more time.
•         Extra precautionary measures need not be taken.
•         Data gives detailed information.

    Secondary Data

•         Data is not reliable.
•         Gathering data is cheap
•         Data is easily accessible through internet or other resources.
•         Data is not homogeneous.
•         Collection of data requires less time.
•         Data needs extra care.
•         Data may not be adequate.