explain the importance of statistics in economics

Statistics are important in every field of business. Statistics is a data interpretation tool used for collecting, classifying and analyzing data. The poverty headcount ratio in Colombo, the country’s capital and the least poor district, was estimated to be 6%, while the corresponding ratio in both Badulla and Moneragala, the two poorer districts, was 37% each. This kind of model build-up is only possible with availability of timely and reliable statistical information. It highlights where resources are most needed, and provides the means to track progress and assess the impact of different policies. Business managers use statistics as an aid to making decisions in the face of uncertainty. Importance of Statistic in the Field of Economics: Statistics are of great importance in the field of economic planning. The computer use in weather forecasting is based on the set of statistics functions. But the value of statistics depends upon their quality. They collect the data and process their customer’s data with the help of statistics. Explain the importance of statistics in economics planning. Without good statistics, the development progress is blind: policy makers cannot learn from their mistakes, the public cannot hold them accountable”. Relationships between supply and demand and imports and exports are found using statistical information. Three primary uses that show the importance of statistics in economics include analyzing data, collecting information and testing hypotheses. A businessman can make correct decision regarding the location of business, marketing of the products, finance, resources, etc…through statistics. The role of statistics in business management is pivotal. In this post, I cover two main reasons why studying the field of statistics is crucial in modern society. The Importance of Statistics in Management Decision Making. Here we have given NCERT Statistics for Economics Class 11 Notes. And good statistics are essential to manage the effective delivery of basic services. Performance & security by Cloudflare, Please complete the security check to access. The reasons for gaining its importance are that it makes human welfare its direct and primary concern. Official statistics help decision makers develop informed policies that impact millions of people. Much of economics depends on statistics. So when a person goes through various procedures of statistics, it widens his knowledge pattern. Now we shall discuss some important fields in which statistics is commonly applied. over different plan periods of the rural and urban unemployment. All the content on this website is copyright protected and can be reproduced only by giving the due courtesy to 'ft.lk' Copyright © 2004 Wijeya Newspapers Ltd. In monitoring and evaluation of ongoing economic reform programmes, statistical data is vital, as it will provide the necessary information on performance indicators which serve to measure the impact of policy and programmes on the quality of life of target populations. For example, your main supplier of a key batch of parts could have a lower cost, but more uncertainty in delivery time. The adoption of the SDGs presents a strategic opportunity to build on the momentum of the data revolution, expanding the data-input categories with new technology innovations, and demonstrating the central role of data in eradicating poverty and promoting sustainable development. Formulation of Economic loss, such as Demand & Supply. Further, timely, accurate and reliable statistics are widely used for the design and implementation stages of country policy frameworks. Existing tools for improving the quality of statistical data should be used and strengthened, and data should be classified using commonly agreed criteria and quality benchmarks. As these potential savings emerge and the quality of statistics improves, priorities for investment in statistics may change. They must also meet the needs of the users and answer the questions posed by policymakers. . Examining statistics about the state of the economy and explaining their significance Understanding different policy options and evaluating their likely outcomes. It also helps him to reach to a rational conclusion. All these statistics function to compare the weather condition with the pre-recorded seasons and conditions. Prof. Alfred Marshall, the renowned economist, in the year 1890, opined, “Statistics are the straw out of which I, like every other economist have to make bricks”. Collecting data, processing data and turning them into information, using data and making them open for others to use and re-use all have costs. Whipple rightly remarks that “Statistics enables one to enlarge his horizon”. While they are often costly to produce, they are readily disseminated and once they are publicly available, it is difficult to exclude other users. Furthermore, disaggregated data will be needed to ensure that no one is left behind. A set of indicators has been developed to measure progress towards the MDGs and targets and, in turn, the indicators rely on information from robust and reliable national statistical systems. In Economic Policies: Index numbers are helpful to the state in formulating and adopting appropriate economic policies. MDG Country Reports document the progress in individual countries and assess each country’s statistical capacity as a fundamental part of weighing whether the country is likely to meet its own MDG targets. Timely, complete, accurate and reliable statistics is critical for creating and sustaining an environment which fosters strong, equitable development. Importance of statistics for evidence-based policy making Amarasekera and Keynote Speaker Dr. Saman Kelegama, The Keynote Address (edited version) delivered by Dr. Saman Kelegama, Executive Director, Institute of Policy Studies of Sri Lanka at the Academic Sessions and the 5th Annual General Meeting of the Institute of Applied Statistics Sri Lanka at the OPA Auditorium, 20 December. Relationships between supply and demand and imports and exports are found using statistical information. Statistics can be used for making sales projections, financial analysis of capital expenditure projects, constructing profit projections for a new product, setting up production quantities, and making a sampling analysis to determine the quality of a product. The use of them by one person or agency does not detract from their use by another. IMORTANCE OF STATISTICS. Statistical systems are empowered, resourced and independent today, to quickly adapt to the new world of data to collect, process, disseminate and use high-quality, open, disaggregated and geo-coded data, both quantitative and qualitative. Cost savings that might also result from the use of new technologies or from complementarities between statistical programmes. Also, if data is to be useful and support good decision-making, they have to be ready at the time when decisions are being made or where the opportunity for influencing the outcomes is there. Poor quality data can mislead. High-resolution satellite imagery, mobile devices, biometric data, and crowd-sourced citizen reporting will influence both official data collection processes and the operation of programmes -- strengthen policy planning, crisis early warning, programme operations, service delivery, impact evaluation etc. As the saying goes: Better Data, Better Lives! A businessman can make correct decision regarding the location of business, marketing of the products, finance, resources, etc…through statistics. Innovation is not just about adopting new technologies, it is also about improving existing ones. The entire process of data design, collection, analysis and dissemination needs to be demonstrably of high quality and integrity. It is an indispensable tool for an economist to understand various business and economic problems and formulate policies to tackle with them. Others are innovating by setting up partnerships for different skill set groups to work together towards a common goal, from research design to data production and analysis. Cloudflare Ray ID: 5fd1d990fb5a396b More diverse, integrated, timely and trustworthy information can lead to better decision-making and real-time citizen feedback. A producer needs statistics for deciding the cost of production and selling price so that he can study competition and demand of commodity in a market. In ancient times, it dealt with the affairs of the state, like collection of information (or data) regarding population and property or wealth of the state so as to sub-serve political purposes of rulers. Most low-income countries are developing national policy frameworks such as poverty reduction strategies as part of their policy processes to reduce poverty. Using reliable data to monitor progress towards the MDGs also allowed governments at national and sub-national levels to effectively focus their development policies, programmes and interventions. Most especially the importance and role of statistics in educational research. Share 0. They need to be compiled correctly, following standard practices and methodology. First, statisticians are guides for learning from data and navigating common problems that can lead you to incorrect conclusions. explain the importance of statistics to government and economics Share with your friends. Monitoring is a continuous process that requires data which is generated to assist in establishing whether planned targets are likely to be achieved or not. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Today, new data collection and monitoring technologies are rapidly becoming available. Importance of Statistics in Economics: 1. Economics is concerned with the optimal distribution of resources in society. The various positives about statistics in economics are: 1. Index numbers are used to measure changes in the value of money. The Importance of Statistics in Education is attributed to ‘how important Statistics is to every field of learning’ in relation to mathematics, education, business, science, etc. These and other innovations will drive new approaches for achieving the SDGs, from pinpointing specific communities and households for health initiatives to integrating real-time monitoring of natural resources into allocation schemes, and tracking government and donor investments. For instance, as part of a long-term commitment to reduce poverty in Sri Lanka, in 2005, the World Bank collaborated with the Department of Census and Statistics (DCS) to conduct the country’s first official poverty mapping exercise to measure poverty incidence at the Divisional Secretariat level. Economic development has to be supported by the whole nation, from economists, politicians, and also civilians. Now statistics holds a central position in almost every field, including industry, commerce, trade, physics, chemistry, economics, mathematics, biology, botany, psychology, astronomy, etc., so the application of statistics is very wide. Statistics are important in every field of business. This helps the government. And then take the decision from that data to make changes in their strategies and policies. Your IP: 139.59.69.61 In early days, it was used only of the collection of the information of the population of the state military. 4. It is an indispensable tool for an economist to understand various business and economic problems and formulate policies to tackle with them. Index numbers measure changes in such magnitudes as prices, incomes, wages, production, employment, products, exports, imports, etc. Which class are you in? Further, the use of modern computers has expedited large-scale statistical computations, and has also made possible new methods that are impractical to perform manually. They give us a measurement of how well something is doing or how likely that something is going to happen. The field of Statistics deals with collection, organisation, analysis, interpretation and presentation of data. Inter-sectoral and inter-temporal comparisons: Quantitative data is used to make inter-sectoral comparison, i.e. It also widens his thinking and reasoning power. Many countries are innovating by expanding the use and impact of data through open data platforms, encouraging citizens to use data to track the quality of their services and to monitor private and public performance. Dear student the importance of statistics to economics -Statistics is an indispensable tool for an economist that helps him to understand an economic problem. This opinion of Dr. Marshall signifies the importance of statistics in economics. Statistics produced and financed by governments have a dual role. Importance of Statistics in Economics: 1. In economics statistical methods are used for collecting and analysis the data. Different evidence based policies of the government are based on statistics. The DCS has created a new poverty map using Census of Population and Housing-2012 and the Household Income and Expenditure Survey-2012/13. In economics statistical methods are used for collecting and analysis the data. Quantitative expression of economic problems: Statistics is an essential tool for an economist to understand the problems of an economy through quantitative data. 2. Problem of spending of income on and by different sections of the people, production of national wealth, adjustment of demand and supply, effect of economic policies on the economy etc. (1) Business As the world embarks on an ambitious project to meet new SDGs, there is an urgent need to mobilise the data revolution for all people and the whole planet in order to monitor progress, hold governments accountable and foster sustainable development. Shipment is coming, exchange, and test hypotheses make it imperative building... They must also meet the needs of the rural and urban unemployment applied. That can lead you to incorrect conclusions purpose to which data is being put periodic! Linked up with statistics on these issues serves as monitoring indicators which are vital for plans. Statistics as an indispensable tool for an economist to understand an economic problem the of... Statistics may change uncertainty and predict when the next shipment is coming no one is left.... 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