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The science of Statistics is as old as human society itself. Any person, who knows at least
basic logic, would always give some statistical evidences, to prove his point. If you
remember an advertisement for milk additive, a mothers calls her son to drink milk in the
afternoon, who is sitting out under a tree wearing a kernel/shell of watermelon to keep his
head cool. On hearing his mother he says to his dog that his friend drank a cup of hot
milk and developed high fever. If you ask an astrologist, to find an auspicious time on a
new moon day, he would give you hundreds of incidences to prove that the day is
inauspicious.
One can find out the initial traces of statistics in the mythological epic of Nal-
Damayanti. Nal while staying with a king in disguise as a Royal driver of chariot treads
his knowledge of driving a chariot with the king’s knowledge of estimating the leaves of
a tree without actually counting. It is a classical case of stratified/cluster sampling.
During the reign of Chandragupta Maurya (324 -300 BC) a very efficient system of
collecting official and administrative data existed. His teacher, philosopher and mentor,
Kautilya, has mentioned the importance of collecting and compiling the data in his
famous book on economics called “Arthashastra”. Raja Todarmal, the land and revenue
minister of Akbar, was known to maintain good records of land and agricultural statistics
(1556 -1605 AD).
In England, statistics was the outcome of Napoleonic wars. Because of the wars, it
became extremely necessary to collect the data pertaining to revenues and expenditures
with great precision and then to plan the new taxes to meet the cost of the war.
The theoretical development of modern statistics came during mid seventeenth
century when the “Theory of Probability” and the “Theory of Game and chance” were
introduced. The chief contributors were mathematicians and gamblers of France,
Germany and England. Pascal (1623 – 1662), P. Fermat (1601 -1665), James Bernoulli
(1654- 1705), De-Moivre (1667 -1754), Laplace (1749 -1827) and Gauss (1777 – 1855)
did monumental work on the theory of Probability.
It was Sir Ronal A Fisher (1890 – 1962) placed statistics on sound footing by applying
it to the number of diversified field such as genetics, biometry, education agriculture etc.
He introduced what is called as “Point Estimation”, Fiducial Inference (Or in simple
words confidence intervals), Exact sampling distributions, Analysis of variance and
Design of Experiments. In short he showed how statistics and probability can be used to
for decision making.
Distrust and Misuse of Statistics: It is already been said that statistics is a deductive way
of proving or disproving a hypothesis (a statement, a conjecture). It is also been said that
the conclusions reached through statistics may not hold cent percent. If proper care is not
taken while collecting the data, such as randomization, it is possible to get a biased result.
A biased result cannot be extrapolated or generalized. Collecting authentic data is very
painful job. Many a times a respondent does not understand, what you are asking or he
misunderstands. Sometime he refuses to answer a particular question. If under such
circumstances, if the investigator is tempted to manipulate the gaps, it is highly
objectionable as the results would be unrealistic.
The vested interest can generate wrong questionnaires and fiddle with the data to suit
their requirements. In short, like any other science statistics can also be misused.
One must remember here that statistics and the techniques of decision making have their
own limitations. So the results obtained through such methods should not be over-
emphasized.
Yet, one comes across individuals who distrust statistical results as rule of thumb. This is
either out of preoccupation or illiteracy. When the development of modern statistics
began, even the electronic calculators were unheard of. So working out the optimum
statistical model was next to impossible. Working out one multivariate model itself, was
a Herculean task. It was extremely difficult to collect and compile raw data. Many great
statisticians made arithmetic mistakes in their calculations.
With globalization of 21st century the volumes of business are growing constantly. The
markets are spread out. Companies are depending on computer networks. Data based
management techniques are employed in every business. So of technology is no more a
barrier. With the availability of menu driven statistical packages, even a moderately
trained person can work out near optimum models.
What is your hunch, you wisdom and your experience, is not of much importance. The
business situations are very fluid and time dependent. The stakes are so large, that they
may kill the company. The data is readily available. What you have to do is to understand
what best can be done with the data, how can it be crunched and how it can be
interpreted. More than anything else what is the reliability of your analysis?
Functions of Statistics: The role of statistics is multifarious. By and large, it gives you a
fair picture of your population. If you incorporate response variables systematically, it
helps you in building models through which you can predict changes. If you incorporate
influencing variables you can fine tune your objectives. To illustrate this we give an
example. We know that the volume of purchase by a consumer depends on his disposable
income. Given a certain level of disposable income there are influencing factors such as
price of product, offers and discounts, shop display which can elevate a person’s desire to
buy more. A mixed model with these variables can give you a better way to understand
your consumer and maintain his patronage.
The matter discussed in the earlier paragraph is a case of regression model. Apart from
point estimation, estimation of confidence limits and testing of various hypotheses,
Correlation and Regression analysis form a major functional area of statistics. The basis
of any statistical investigation is to understand the underlying probability distribution of
an attribute possessed by individuals from the population. This is achieved through the
compilation and cross-tabulation of data. Working out central tendencies and measures of
dispersion gives us further knowledge about population. Working out the degree of
dependence of two or more attributes on each other gives you the effect of a set of
attributes on a desired attribute. The testing of hypothesis a more sophisticated method of
decision making, which requires carefully designing an experiment and then analyzing
the outcome.
It is literally driven by the researchers from the field of science, technology,
psychology, sociology, anthropology, economics, educationist, businessman, sephalogist
etc. Your literacy in statistics will be highly appreciated and properly rewarded; in the
absence of it you will be one among many who get frightened with numbers.