Importance of Statistics

Today, the importance of statistics is increasing in various fields. Statistics is used for forecasting and for making current decisions. The importance/application of statistics can be summarized in the following points:

1. Statistics in Economics: Statistics is indispensable for identifying and solving economic problems. It is used to formulate and verify the rules and principles of economics. Therefore, statistics is considered the foundation of economics. The main subjects of economics are consumption, production, exchange, distribution, and revenue. The importance of statistics in relation to these subjects can be explained as follows:
   • Consumption: Statistics is useful in finding out the consumption expenditure of different classes of society. Data on consumption helps in budget formulation and raising living standards.
   • Production: Statistics is used to solve questions in the field of production such as what to produce, how much to produce, how to produce, and for whom to produce. Comparative studies of production processes are done using statistics. Production-related statistics are very important and helpful in adjusting the demand and supply of goods and determining the production volume.
   • Exchange: Statistics is useful for studying the exchange value of goods, foreign exchange rates, import prices, export prices, balance of payments, etc.
   • Distribution: Statistical methods are used to solve the problem of how to distribute national income among the factors of production: land, capital, labor, and entrepreneurship.
   • Revenue: Statistics is also necessary to know how the government obtains income from various sources. The government also takes the help of statistics to determine the taxpaying capacity of taxpayers and to collect taxes.
2. Statistics in Industry, Trade, and Commerce: Industrialists and traders need statistical methods to accurately forecast the market demand and prices of their goods and services. Firms that can make accurate forecasts among competing firms are more likely to earn higher profits.
3. Statistics in Planning: Planning and its implementation are essential for the government, industrialists, traders, and the general public. It is not possible to make any plan in the absence of statistics. Statistics is needed to review the past, interpret the present, estimate the future, and make the plan successful.
4. Statistics for the State: The state runs the administration, determines policies, and solves various problems related to public life. For this, data from various sectors is required. Data obtained from national censuses, agricultural censuses, industrial censuses, literacy rates, employment, and poverty measurement help in running the state.
5. Statistics in Science and Social Science: Statistics and statistical methods are also necessary for the study of biology, botany, physics, chemistry, astronomy, environmental science, geography, and social science. This makes it clear that the importance of statistics is increasing today. Statistics is equally important in the banking and financial sectors, as well as in the transportation and communication sectors.