1 Introduction to Statistics “To guess is cheap. To guess wrongly is expensive” -Old Chinese Proverb

2 Numerical statements of facts which are highly convenient and meaningful forms of communication

3 Statements  The crime rate has gone up by 15% of what it was last year  The average salary of a professor in Oxford University is $75,000 per year  The rate of inflation in India is expected to remain above 5% per year for the next 5 years  60% of car owners in a country consider Japanese cars superior in quality than American cars

4 Statistics is concerned with proper collection of data, organising this data into manageable and presentable form, analysing and interpreting the data into conclusions for useful purposes.

5 1.Proper collection of data 2.Organisation and classification of data 3.Presentation of data 4.Analysis of data 5.Interpretation of data

6 Characteristics of Statistics 1.Statistics are aggregate of facts. 2.Statistics, generally are not the outcome of a single cause, but are affected by multiple causes. 3.Statistics are numerically expressed.

7 4.Statistical data is collected in a systematic manner. 5.Statistics are collected for a predetermined purpose. 6.Statistics are enumerated or estimated according to reasonable standard of accuracy. 7.Statistics must be placed in relation to each other.

8 Functions  It condenses and summarizes the data  It facilitates classification and comparison  It helps in determining functional relationship between two or more phenomenon  It helps in predicting future trend  It helps in policy formulation

9 Limitations 1.It does not deal with individual values 2.It cannot deal with qualitative characteristics 3.Statistical conclusions are not universally true 4.Statistics can be misused

10 Scope of Statistics “ Statistical thinking will one day be as necessary for effective citizenship as the ability to read and write” - H.G. Wells

11 Scope  Government  Economic  Physical, Natural and Social sciences  Research  Others  Business and Management

12 Business and Management Entrepreneurship Production Marketing Purchasing Personnel Investment Banking Quality Control

13 “When the history of modern time is finally written, we shall read it as beginning with the age of steam and progressing through the age of electricity to that of statistics” - An over-enthusiastic, statistically aware business executive

14 Comment on the following Statistical Statements: 1. A survey reveals that children of professors have high IQs. It is further revealed that the professors as well as their parents also are very intelligent. Hence the inference is that intelligence is hereditary. 2. Most of the car accidents occur within 15 miles of home. Hence, it is safer if you are driving beyond the 15 mile limit.

15 3. A survey revealed that the divorce rate of couples with children is much less than childless couples; therefore, having children reduces the chances of a divorce. 4. The average income of a bank manager today is three times his average income 25 years ago. This means that a bank manager, today, is three times more prosperous than 25 years ago.