What are the importance of statistics

Asked by sahuramchandra472 | 4th Aug, 2019, 05:05: PM

Expert Answer:

  1. Quantitative expression of  economic  problems: Statistics  is  an  essential  tool  for  an  economist  to understand  the  problems  of  an  economy through  quantitative  data. Example: The problem  of poverty in  India  can be  quantitatively  expressed  as there  is a substantial  decline  in poverty  ratios  in India from 55% in 1973to 36% in1993.
  2. Inter-sectoral and inter-temporal comparisons: This quantitative data is further used to make inter-sectoral comparison ,i.e. across   different   sectors   of   the economy   and   inter-temporal comparisons ,i.e. over different plan periods of the rural and urban unemployment.
  3. Cause  and  effect  relationship: Different  sets  of  data  are  used  to  find  the  cause  and  effect relationship. This enables policy makers to formulate policy to solve the problem of an economy.
  4. Economic  equilibrium: Statistical  data  helps  economists  to  understand  the behaviour  of  the producer  and  consumer  in  the  market. Example: How the  producer choose sthe  combination  of inputs to produce the goods to maximise their profit.
  5. Developing  economic  theories: This  also facilitates economists to  develop  theories as  how  the prices of goods vary in relation to the demand for the product.
  6. Forecasting: Statistical  data  are  useful  to  forecast  the  changes  in  the  factors  which  influence  other factors. This information enables economists to formulate polices and suggestions to overcome the problem.
  7. Formulation   of   policies: Statistical   data   is   essential   for   formulating   policies   of economic development. Example: If the  government  wants  to  formulate  or  modify  labour  laws,  then it will require statistical data on working conditions, number of working hours and minimum wages received by workers.



Answered by Christina | 5th Aug, 2019, 10:12: AM

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