To give you an example, wealth and income statistics help in the framing of policies for reducing disparities of income. Further, it enables us to frame policies in relevant areas for better results. Statistics also help us in understanding various economic problems with precision and clarity. The understanding and study of Economic Problems Statistics enables us to compare these theories in real-life situations. These theories are for academic interest only unless they are put through an empirical test or verification.
Test and Verification of Economic Theories or Principles or HypothesisĮconomists have developed various theories and principles based on deductive reasoning in the areas of production, distribution, exchange, consumption, business cycles, taxation, etc. Applications of statistics and its techniques Hence, it needs strong statistical support in the form of data and techniques. This inductive logic requires the observation of economic behavior of a large number of units. In economics, many scholars have now shifted their stand from deductive logic to inductive logic in order to explain any economic proposition. However, today, with computers and information technology, statistical data and advanced techniques of statistical analysis are a boon to many. Also, most statistical techniques were not developed enough for application in all disciplines. Traditionally, the application of statistics was limited since the economic theories were based on deductive logic. Statistical information helps to understand the economic problems and formulation of economic policies. Statistics offers information to answer some basic questions in economics – EconomicsĮconomics is about allocating limited resources among unlimited ends in the most optimal manner. Also, the availability of statistical information enables the government to frame policies and guidelines to improve the overall working of the system. Today, the State authorities collect statistics through their agencies on multiple aspects like population, agriculture, defense, national income, oceanography, natural resources, space research, etc.įurther, nearly all ministries at the Central as well as State level, rely heavily on statistics for their smooth functioning. Over the years, with the change in the nature of functions of the State from maintaining law and order to promoting human welfare, the scope of the application of statistics has changed too. for the formation of suitable military and fiscal policies. Traditionally, people used statistics to collect data pertaining to manpower, crimes, wealth, income, etc. They use this data to frame policies and guidelines in order to perform smoothly. Different department and authorities require various facts and figures on different matters. Let’s look at some important areas of application of statistics:įor the effective functioning of the State, Statistics is indispensable. In the age of information technology, statistics has a wide range of applications.