explain the importance of statistics in economics

Which class are you in? Importance of the Study of Economics: The importance and utility of the subject of Economics can be judged from this fact that it is now considered to be one of the most important and useful subject as compared to any other branch of knowledge. The importance and availability of timely and reliable statistics on socio-economic life of a sovereign nation cannot be over-stressed. A robust framework for quality assurance is required, particularly for official data. Economics largely depends upon statistics. As the saying goes: Better Data, Better Lives! In economics statistical methods are used for collecting and analysis the data. IMORTANCE OF STATISTICS. This opinion of Dr. Marshall signifies the importance of statistics in economics. 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. In Economic Policies: Index numbers are helpful to the state in formulating and adopting appropriate economic policies. 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. It has emerged as a major player and pushed economics to new heights by making it more of a concrete science. Trade-offs between timeliness and other quality dimensions depend on the purpose to which data is being put. Whipple rightly remarks that “Statistics enables one to enlarge his horizon”. Examining statistics about the state of the economy and explaining their significance Understanding different policy options and evaluating their likely outcomes. In the long run, new technologies for data collection and analysis may yield lower costs, but in the near term they are likely to require new investments. Importance of Statistics in Economics: 1. Importance of statistics in Economics :-1. This new poverty map, can inform policy makers whether previous pockets of poverty have persisted and whether new pockets have emerged, which could be used to strengthen the poverty alleviation exercise in the country. Dear student the importance of statistics to economics -Statistics is an indispensable tool for an economist that helps him to understand an economic problem. All the important branches of Economics—consumption, production, exchange, distribution, public finance—use statistics for the purpose of comparison, presentation, interpretation, etc. For example, Econometrics is a branch of economics that applies statistical methods to the empirical study of economic theories and relationships; Business analytics is a rapidly developing business process that applies statistical methods to data sets to develop new insights and understanding of business performance and opportunities; Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries, etc. All the countries of the world are developing they’re economic by organizing economic activities. 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. Statistics for Economics Class 11 Notes Chapter 2 Collection of Data Sources of Data There are two sources of data Primary Source of Data It implies collection of data from its source of origin. Economics largely depends upon statistics. They must also serve the need of the public to monitor the activities of government and the changes in public well-being. The importance of statistics in recent years cannot be over emphasized. Statistics indispensable in economic studies. For example, improved civil registration and vital statistics systems may reduce the costs of producing vital statistics from surveys. The field of economics depends greatly on the likelihood that something is going to happen. Statistics is an important field of study because of its application in almost all walks of life. But to meet the Goals, comprehensive information is needed to monitor progress towards national and international targets, to inform policies and development strategies, and to spur the international community into action. A businessman can make correct decision regarding the location of business, marketing of the products, finance, resources, etc…through statistics. (c) Statistics and the study of exchange: Production is based on national and international demand. They must also meet the needs of the users and answer the questions posed by policymakers. • It is the analysis, interpretation, preservation, and presentation of data. Business owners face many situations with outcomes that seem unpredictable. Examining statistics about the state of the economy and explaining their significance Clear standards need to be developed to safeguard quality. It highlights where resources are most needed, and provides the means to track progress and assess the impact of different policies. Importance Of Microeconomics Microeconomics and Macroeconomics are two approaches forwarded by economists. Three primary uses that show the importance of statistics in economics include analyzing data, collecting information and testing hypotheses. Formulation of Economic loss, such as Demand & Supply. - {{hitsCtrl.values.hits}}, From left: Institute of Applied Statistics Sri Lanka (IASSL) President Dr. N.R. Furthermore, disaggregated data will be needed to ensure that no one is left behind. Infact the Role of mathematics and Statistics to the field of Economics cannot be over emphasized as we look at the below outlines. From the United Nations view point, statistics is a pathfinder for solution as well as a veritable tool in assessing the extent or level of national development of a country in a given period. The importance of Statistics in the subject of Economics is well known as all the collection, compilation, processing, dissemination, and analysis of economic data takes place with the help of statistics. 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. Your IP: 139.59.69.61 The DCS has created a new poverty map using Census of Population and Housing-2012 and the Household Income and Expenditure Survey-2012/13. 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. The MDG framework strengthened the use of robust and reliable data for evidence-based decision-making, as many countries integrated the MDGs into their own national priorities and development strategies. All these statistics function to compare the weather condition with the pre-recorded seasons and conditions. Most especially the importance and role of statistics in educational research. Timely, complete, accurate and reliable statistics is critical for creating and sustaining an environment which fosters strong, equitable development. It was Ragnar Frisch who used these two terms for the first time in Economics. It is an important branch of mathematics. More diverse, integrated, timely and trustworthy information can lead to better decision-making and real-time citizen feedback. These problems are described, compared and correlated by using statistics. Much of economics depends on statistics. Statistics are crucial for the business to make future decisions. But the value of statistics depends upon their quality. Importance of Business Statistics Business Statistics helps a business to: Deal with uncertainties by forecasting seasonal, cyclic and general economic fluctuations Helps in Sound Decision making by providing accurate estimates about costs, demand, prices, sales etc. Without good statistics, the development progress is blind: policy makers cannot learn from their mistakes, the public cannot hold them accountable”. Statistical data and their analysis are used to solve a variety of economic problems such as in consumption, production, distribution of income and assets, poverty, unemployment etc. Thus, statistics on these issues serves as monitoring indicators which are vital for development plans. Reliable statistics describe the reality of people’s everyday lives. Today, statistical methods are applied in most of the fields that involve decision making, for making accurate inferences from arranged data. Index numbers are used to measure changes in the value of money. And good statistics are essential to manage the effective delivery of basic services. 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. - 14645927 For example, Satellite imagery is increasingly available for free at a moderate resolution, and at a cost for high-resolution sources. For instance, a number of goals have become generally accepted as the objective of economic policy and development. Performance & security by Cloudflare, Please complete the security check to access. And then take the decision from that data to make changes in their strategies and policies. 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. Because it is not easy to ascertain the quality of statistics directly, users must have confidence in the producer and in the methods and standards employed in the production of statistics. Specialties have evolved to apply statistical theory and methods to various disciplines. New methods of data collection and analysis based on new technologies may replace or reduce the cost of traditional methods, but they will require additional investments. Today, statistics or more specifically statistical method is used extensively in almost all phases of human endeavour. To be effective, statistical systems must have legitimacy backed up by legislation that provides both the safeguards of confidentiality for the providers of raw data and assurances of integrity and accessibility for users. The widespread acceptance and use of the map, which gave poverty-related estimates at the Divisional Secretariat (DS) division level, is a testament to DCS’s success in disseminating the results of the poverty mapping exercise throughout the government agencies as well as to the general public. There are a variety of indicators that economists use to measure the level of economic development in a country – declining poverty rates, increasing literacy rates, declining infant morbidity, increasing life expectancy, and so on. 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. Economic statistics is a topic in applied statistics that concerns the collection, processing, compilation, dissemination, and analysis of economic data.It is also common to call the data themselves 'economic statistics', but for this usage see economic data.The data of concern to economic statistics may include those of an economy within a region, country, or group of countries. 4. This includes internal systems as well as periodic audits by professional and independent third parties. Business managers use statistics as an aid to making decisions in the face of uncertainty. The SDGs will continue the fight against extreme poverty but will add the challenges of ensuring more equitable development and environmental sustainability. . Importance of statistics can be classified into different fields such as:-1. It is an indispensable tool for an economist to understand various business and economic problems and formulate policies to tackle with them. Poor quality data can mislead. In this post, I cover two main reasons why studying the field of statistics is crucial in modern society. Economics is concerned with the optimal distribution of resources in society. It also helps him to reach to a rational conclusion. Statistics is a data interpretation tool used for collecting, classifying and analyzing data. explain the importance of statistics to government and economics Share with your friends. 2. The development in statistical studies has considerably increased its scope and importance. Share 0. Statistics is a collection of numerical facts or statistical deals with the collection , arrangement, presentation, Analysis, Interpretation of quantity information. As these potential savings emerge and the quality of statistics improves, priorities for investment in statistics may change. Statistics produced and financed by governments have a dual role. The field of economics depends greatly on the likelihood that something is going to happen. Role of statistics in planning, progress monitoring and evaluation of development activities • Further, timely, accurate and reliable statistics are widely used for the design and implementation stages of country policy frameworks. The relationship between supply and demand is studied by statisticalmethods; imports and exports, inflation rates, and per capita income are problems which require a good knowledge of statistics 536 views Sponsored by Stansberry Research 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. 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. Importance of the Study of Economics: The importance and utility of the subject of Economics can be judged from this fact that it is now considered to be one of the most important and useful subject as compared to any other branch of knowledge. Thursday, 29 December 2016 08:22 For example, statistical information is used to determine supply and demand for exports and imports. In economics statistical methods are used for collecting and analysis the data. Without high-quality data providing the right information on the right things at the right time; designing, monitoring and evaluating effective policies becomes almost impossible.” Such as wages, price, time series analysis, demand analysis. Importance of Statistic in the Field of Economics: Statistics are of great importance in the field of economic planning. Businessmen also find statistics as an indispensable tool in their regular activities. Importance and Distrust of Statistics Introduction Statistics is an inevitable tool for an economist to analyse various economic problems. And good statistics are essential to manage the effective delivery of basic services. This helps the government. Following the progress made under the MDGs, now the world’s governments are negotiating a new set of Sustainable Development Goals (SDGs) for the period 2016 to 2030. This information is used for: central and local finance allocation; housing and land use planning; health care planning; providing education facilities; benchmarking other projections and as a control for smaller area projections; looking at the implications of an ageing population and making national and international comparisons, etc. These new innovations will dramatically advance the ability to monitor the impact of development programmes. Thus, saving money and ensuring the best quality with optimum utilisation of resource. In simple terms, they are the evidence on which policies are built. Inter-sectoral and inter-temporal comparisons: Quantitative data is used to make inter-sectoral comparison, i.e. These approaches help us to study the nature of economic problems. The unprecedented rate of innovation in data collection techniques and technologies, as well as the capacity to distribute data widely and freely, have expanded the horizon. The Importance and Scope of Statistics can be very well appreciated as the researcher follows:. Quantitative expression of economic problems: Statistics is an essential tool for an economist to understand the problems of an economy through quantitative data. This kind of model build-up is only possible with availability of timely and reliable statistical information. Economists use statistics to collect information, analyze data, and test hypotheses. Statistics play a crucial role in weather forecasting. Statistics is very important when it comes to the conclusion of research. 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. Importance of Statistic in Economics: The contribution of statistics to the field of economics is commendable. The role of statistics in national development is very critical. across different sectors of the economy and inter-temporal comparisons, i.e. You may need to download version 2.0 now from the Chrome Web Store. The importance of development economics is that it examines the factors that need to come together to bring about economic development. For instance, preparation of central and provincial government budgets mainly depends upon statistics because it helps in estimating the expected expenditures and revenue from different sources. Importance of statistics for evidence-based policy making The MDGs have proved to be a powerful tool for building the political will needed, and the Goals provide a focus for both government and civil society. The reasons for gaining its importance are that it makes human welfare its direct and primary concern. Today, new data collection and monitoring technologies are rapidly becoming available. Statistics is the area of mathematics we use to explore and try to explain the uncertain world in which we live. But here in this blog, we are talking about the importance of statistics. 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. They help identify needs, set goals, and monitor progress. This in turn enables individuals, public and private institutions, and companies to make choices that are good for them and for the world they live in. Movement towards their attainment is deemed to lead to macroeconomic stability and increased national welfare. Hence, statistics are the eyes of administration of the state. Thus, economics as a discipline is linked up with statistics on many occasions. Statistics and Economics: Statistics is an integral part of economics. The subject involves. 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. Statistics are also deployed to monitor progress towards the internationally agreed MDGs. So when a person goes through various procedures of statistics, it widens his knowledge pattern. Statistics and business: Statistics is an irresponsible tool of production control. They must serve the need of government for efficient administration and management as well as for longer-term policy making. As has been mentioned time and again, statistics adds a touch of reliability and concreteness to economics by quantitatively expressing data. This helps the government. They give us a measurement of how well something is doing or how likely that something is going to happen. The computer use in weather forecasting is based on the set of statistics functions. Relationships between supply and demand and imports and exports are found using statistical information. It also improves accuracy, simplifies collection of GIS and image data, streamlines integration with other information streams, and opens up the possibility of incorporating micro-chip based sensors into survey processes. Statistics are public goods. Before discussing the importance Of Microeconomics, let us know what the Microeconomics is. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. The Role of Statistics in Economics. Today, we see that economic growth in India is hampered by faulty policies and better economic policymaking largely depends on the availability of improved data or statistics. 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. Economists use statistics to collect information, analyze data, and test hypotheses. They need to be compiled correctly, following standard practices and methodology. Quantitative Expression. These innovations will dramatically advance national statistical offices’ and the international community’s ability to monitor the impacts of development programmes, in addition to informing the way they are designed and implemented. A study of the rise or fall in the value of money is essential for determining the direction of production and employment to facilitate future payments and to know changes in the real income of different groups of … Chapter Wise CBSE Statistics for Economics Class 11 Quick Revision Notes and Key Points in English an Hindi Pdf free download was designed by expert teachers from latest edition of NCERT books to get good marks in board exams. The following quote from the World Bank provides a good starting point to the sub-topic: “Why do statistics matter? 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. All these statistics function to compare the weather condition with the pre-recorded seasons and conditions. Explain the role and importance of statistics in Economics öõÎ¼ß ÒÎ¼ß S ØÖ from ECN MACROECONO at Action for Autism Statistics help in economic planning . In this post, I cover two main reasons why studying the field of statistics is crucial in modern society. 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. Finally, improved data sources, sound statistical methods, new technologies and strengthened statistical systems enable better decisions that eventually result in better lives for all of us. The development of geospatial and remote sensing capabilities should improve the quality of agricultural statistics produced from surveys and increase the efficiency of census and household survey programmes. The role of statistics in national development is very critical. Role of statistics for global monitoring Understanding what happens in markets and the macroeconomy. Samaratunghe, IASSL Secretary D.A.B.N. Explore and try to explain the importance of statistics Introduction statistics is crucial in modern society also... Of an economy through quantitative data is being put gaining its importance are it. 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