There are numerous definitions given to statistics. The fact that there are numerous definitions reflects that statistics has been rigorously used in all fields.
Statistics may be defined as a science of counting. According to Bowley A.L., statistics is the science of the measurement of a social organism, which is regarded as a whole in all of its manifestations. Statistics can also be regarded as the science that involves estimations and probabilities.
According to all of the above definitions of statistics, one can say that statistics is not only a device for collecting numerical data, but it can also be used to obtain certain statistical techniques. Such techniques in statistics will in turn help the researcher handle the numerical data, thereby allowing the researcher to draw an appropriate statistical inference about the data.
Statistics is important in numerous sectors and disciplines. For one, statistics works as an indispensable tool for planning. For the efficient working of an organization, appropriate planning is required. Statistics can help by performing analyses and drawing out valid inferences on complex data, like data on consumption, data on production, data on investment, data on income, etc.
Statistics is closely related to mathematics. In general, statistics is essentially dependent on mathematics. The techniques in statistics are primarily based on mathematical calculations. For example, statistics is mainly based on the theory of probability, which is an advanced mathematical theory. Thus, one can say that statistics is a branch of applied mathematics that specializes in data.
The techniques in statistics have been proved to be immensely useful in solving problems related to economic theory. The problems in economic theory like production, consumption, income, expenditure, etc. are addressed and solved by the techniques of statistics. Such techniques include index numbers, time series analysis, demand analysis, etc.
Statistics has also been used widely in business. Statistics is an indispensible tool for production control. The theory of probability and expectation has been widely used in life insurance, which is one of the established branches of business and commerce.
In the production industry, a very popular technique of statistics called statistical quality control is used. This technique of statistics is generally used in production engineering to find whether or not the production process is under control, and whether or not the product is conforming to the specifications.
In astronomy, a technique of statistics called the principle of least squares is used to study the movement of stars and planets.
Statistics is also used in the military. A technique of statistics called decision functions can be used widely during war to plan maximum destruction with minimum efforts.
Statistics, however, has its limitations.
Because the theory that statistics is based on is quantitative data, statistics is not at all matched with qualitative phenomenon.
The major limitation of statistics is that statistics deals with an aggregate of objects and does not give any specific importance to an individual item. Thus, the information about individuals in statistics is absolutely meaningless.
The facts in statistics are never exact. They are always based approximates in nature. For example, let us consider the following statement: there is a 20% chance that sample A will be different from sample B. The term ‘20%’ depicts that the laws based on statistics are mere approximations. There is no 100% surety that the inference drawn from the technique of statistics is absolutely true.
The most dangerous limitation of statistics is that it is liable to be misused by a person who is not an expert in statistics. Statistics can be manipulated and molded in any form according to the nature of the argument.
