1.

DEFINITIONS, SCOPE AND

LIMITATIONS
1.1 Introduction:
In the modern world of computers and information
technology, the importance of statistics is very well recogonised by
all the disciplines. Statistics has originated as a science of statehood
and found applications slowly and steadily in Agriculture,
Economics, Commerce, Biology, Medicine, Industry, planning,
education and so on. As on date there is no other human walk of
life, where statistics cannot be applied.
1.2 Origin and Growth of Statistics:
The word ‘ Statistics’ and ‘ Statistical’ are all derived from
the Latin word Status, means a political state. The theory of
statistics as a distinct branch of scientific method is of
comparatively recent growth. Research particularly into the
mathematical theory of statistics is rapidly proceeding and fresh
discoveries are being made all over the world.
1.3 Meaning of Statistics:
Statistics is concerned with scientific methods for
collecting, organising, summarising, presenting and analysing data
as well as deriving valid conclusions and making reasonable
decisions on the basis of this analysis. Statistics is concerned with
the systematic collection of numerical data and its interpretation.
The word ‘ statistic’ is used to refer to

1. Numerical facts, such as the number of people living in

particular area.
2. The study of ways of collecting, analysing and interpreting
the facts.
1.4 Definitions:
Statistics is defined differently by different authors over a
period of time. In the olden days statistics was confined to only
state affairs but in modern days it embraces almost every sphere of

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human activity. Therefore a number of old definitions, which was
confined to narrow field of enquiry were replaced by more
definitions, which are much more comprehensive and exhaustive.
Secondly, statistics has been defined in two different ways –
Statistical data and statistical methods. The following are some of
the definitions of statistics as numerical data.

1. Statistics are the classified facts representing the conditions

of people in a state. In particular they are the facts, which
can be stated in numbers or in tables of numbers or in any
tabular or classified arrangement.
2. Statistics are measurements, enumerations or estimates of
natural phenomenon usually systematically arranged,
analysed and presented as to exhibit important inter-
relationships among them.
1.4.1 Definitions by A.L. Bowley:
Statistics are numerical statement of facts in any department
of enquiry placed in relation to each other. - A.L. Bowley
Statistics may be called the science of counting in one of the
departments due to Bowley, obviously this is an incomplete
definition as it takes into account only the aspect of collection and
ignores other aspects such as analysis, presentation and
interpretation.
Bowley gives another definition for statistics, which states
‘ statistics may be rightly called the scheme of averages’ . This
definition is also incomplete, as averages play an important role in
understanding and comparing data and statistics provide more
measures.
1.4.2 Definition by Croxton and Cowden:
Statistics may be defined as the science of collection,
presentation analysis and interpretation of numerical data from the
logical analysis. It is clear that the definition of statistics by
Croxton and Cowden is the most scientific and realistic one.
According to this definition there are four stages:
1. Collection of Data: It is the first step and this is the foundation
upon which the entire data set. Careful planning is essential before
collecting the data. There are different methods of collection of
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data such as census, sampling, primary, secondary, etc., and the
investigator should make use of correct method.
2. Presentation of data: The mass data collected should be
presented in a suitable, concise form for further analysis. The
collected data may be presented in the form of tabular or
diagrammatic or graphic form.
3. Analysis of data: The data presented should be carefully
analysed for making inference from the presented data such as
measures of central tendencies, dispersion, correlation, regression
etc.,
4. Interpretation of data: The final step is drawing conclusion
from the data collected. A valid conclusion must be drawn on the
basis of analysis. A high degree of skill and experience is necessary
for the interpretation.
1.4.3 Definition by Horace Secrist:
Statistics may be defined as the aggregate of facts affected
to a marked extent by multiplicity of causes, numerically
expressed, enumerated or estimated according to a reasonable
standard of accuracy, collected in a systematic manner, for a
predetermined purpose and placed in relation to each other.
The above definition seems to be the most comprehensive
and exhaustive.
1.5 Functions of Statistics:
There are many functions of statistics. Let us consider the
following five important functions.
1.5.1 Condensation:
Generally speaking by the word ‘ to condense’ , we mean to
reduce or to lessen. Condensation is mainly applied at embracing
the understanding of a huge mass of data by providing only few
observations. If in a particular class in Chennai School, only marks
in an examination are given, no purpose will be served. Instead if
we are given the average mark in that particular examination,
definitely it serves the better purpose. Similarly the range of marks
is also another measure of the data. Thus, Statistical measures help
to reduce the complexity of the data and consequently to
understand any huge mass of data.
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1.5.2 Comparison:
Classification and tabulation are the two methods that are
used to condense the data. They help us to compare data collected
from different sources. Grand totals, measures of central tendency
measures of dispersion, graphs and diagrams, coefficient of
correlation etc provide ample scope for comparison.
If we have one group of data, we can compare within itself.
If the rice production (in Tonnes) in Tanjore district is known, then
we can compare one region with another region within the district.
Or if the rice production (in Tonnes) of two different districts
within Tamilnadu is known, then also a comparative study can be
made. As statistics is an aggregate of facts and figures, comparison
is always possible and in fact comparison helps us to understand
the data in a better way.
1.5.3 Forecasting:
By the word forecasting, we mean to predict or to estimate
before hand. Given the data of the last ten years connected to
rainfall of a particular district in Tamilnadu, it is possible to predict
or forecast the rainfall for the near future. In business also
forecasting plays a dominant role in connection with production,
sales, profits etc. The analysis of time series and regression analysis
plays an important role in forecasting.
1.5.4 Estimation:
One of the main objectives of statistics is drawn inference
about a population from the analysis for the sample drawn from
that population. The four major branches of statistical inference are

1. Estimation theory
2. Tests of Hypothesis
3. Non Parametric tests
4. Sequential analysis
In estimation theory, we estimate the unknown value of the
population parameter based on the sample observations. Suppose
we are given a sample of heights of hundred students in a school,
based upon the heights of these 100 students, it is possible to
estimate the average height of all students in that school.
1.5.5 Tests of Hypothesis:
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 A statistical hypothesis is some statement about the
probability distribution, characterising a population on the basis of
the information available from the sample observations. In the
formulation and testing of hypothesis, statistical methods are
extremely useful. Whether crop yield has increased because of the
use of new fertilizer or whether the new medicine is effective in
eliminating a particular disease are some examples of statements of
hypothesis and these are tested by proper statistical tools.
1.6 Scope of Statistics:
Statistics is not a mere device for collecting numerical data,
but as a means of developing sound techniques for their handling,
analysing and drawing valid inferences from them. Statistics is
applied in every sphere of human activity – social as well as
physical – like Biology, Commerce, Education, Planning, Business
Management, Information Technology, etc. It is almost impossible
to find a single department of human activity where statistics
cannot be applied. We now discuss briefly the applications of
statistics in other disciplines.
1.6.1 Statistics and Industry:
Statistics is widely used in many industries. In industries,
control charts are widely used to maintain a certain quality level. In
production engineering, to find whether the product is conforming
to specifications or not, statistical tools, namely inspection plans,
control charts, etc., are of extreme importance. In inspection plans
we have to resort to some kind of sampling – a very important
aspect of Statistics.
1.6.2 Statistics and Commerce:
Statistics are lifeblood of successful commerce. Any
businessman cannot afford to either by under stocking or having
overstock of his goods. In the beginning he estimates the demand
for his goods and then takes steps to adjust with his output or
purchases. Thus statistics is indispensable in business and
commerce.
As so many multinational companies have invaded into our
Indian economy, the size and volume of business is increasing. On
one side the stiff competition is increasing whereas on the other
side the tastes are changing and new fashions are emerging. In this
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connection, market survey plays an important role to exhibit the
present conditions and to forecast the likely changes in future.
1.6.3 Statistics and Agriculture:
Analysis of variance (ANOVA) is one of the statistical
tools developed by Professor R.A. Fisher, plays a prominent role in
agriculture experiments. In tests of significance based on small
samples, it can be shown that statistics is adequate to test the
significant difference between two sample means. In analysis of
variance, we are concerned with the testing of equality of several
population means.
For an example, five fertilizers are applied to five plots each
of wheat and the yield of wheat on each of the plots are given. In
such a situation, we are interested in finding out whether the effect
of these fertilisers on the yield is significantly different or not. In
other words, whether the samples are drawn from the same normal
population or not. The answer to this problem is provided by the
technique of ANOVA and it is used to test the homogeneity of
several population means.
1.6.4 Statistics and Economics:
Statistical methods are useful in measuring numerical
changes in complex groups and interpreting collective
phenomenon. Nowadays the uses of statistics are abundantly made
in any economic study. Both in economic theory and practice,
statistical methods play an important role.
Alfred Marshall said, “ Statistics are the straw only which I
like every other economist have to make the bricks”. It may also be
noted that statistical data and techniques of statistical tools are
immensely useful in solving many economic problems such as
wages, prices, production, distribution of income and wealth and so
on. Statistical tools like Index numbers, time series Analysis,
Estimation theory, Testing Statistical Hypothesis are extensively
used in economics.
1.6.5 Statistics and Education:
Statistics is widely used in education. Research has become
a common feature in all branches of activities. Statistics is
necessary for the formulation of policies to start new course,
consideration of facilities available for new courses etc. There are
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many people engaged in research work to test the past knowledge
and evolve new knowledge. These are possible only through
statistics.
1.6.6 Statistics and Planning:
Statistics is indispensable in planning. In the modern world,
which can be termed as the “world of planning”, almost all the
organisations in the government are seeking the help of planning
for efficient working, for the formulation of policy decisions and
execution of the same.
In order to achieve the above goals, the statistical data
relating to production, consumption, demand, supply, prices,
investments, income expenditure etc and various advanced
statistical techniques for processing, analysing and interpreting
such complex data are of importance. In India statistics play an
important role in planning, commissioning both at the central and
state government levels.
1.6.7 Statistics and Medicine:
In Medical sciences, statistical tools are widely used. In
order to test the efficiency of a new drug or medicine, t - test is
used or to compare the efficiency of two drugs or two medicines, t-
test for the two samples is used. More and more applications of
statistics are at present used in clinical investigation.
1.6.8 Statistics and Modern applications:
Recent developments in the fields of computer technology
and information technology have enabled statistics to integrate their
models and thus make statistics a part of decision making
procedures of many organisations. There are so many software
packages available for solving design of experiments, forecasting
simulation problems etc.
SYSTAT, a software package offers mere scientific and
technical graphing options than any other desktop statistics
package. SYSTAT supports all types of scientific and technical
research in various diversified fields as follows
1. Archeology: Evolution of skull dimensions
2. Epidemiology: Tuberculosis
3. Statistics: Theoretical distributions
4. Manufacturing: Quality improvement
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 5. Medical research: Clinical investigations.
6. Geology: Estimation of Uranium reserves from ground
water
1.7 Limitations of statistics:
Statistics with all its wide application in every sphere of
human activity has its own limitations. Some of them are given
below.
1. Statistics is not suitable to the study of qualitative
phenomenon: Since statistics is basically a science and deals
with a set of numerical data, it is applicable to the study of
only these subjects of enquiry, which can be expressed in
terms of quantitative measurements. As a matter of fact,
qualitative phenomenon like honesty, poverty, beauty,
intelligence etc, cannot be expressed numerically and any
statistical analysis cannot be directly applied on these
qualitative phenomenons. Nevertheless, statistical techniques
may be applied indirectly by first reducing the qualitative
expressions to accurate quantitative terms. For example, the
intelligence of a group of students can be studied on the basis
of their marks in a particular examination.
2. Statistics does not study individuals: Statistics does not
give any specific importance to the individual items, in fact it
deals with an aggregate of objects. Individual items, when
they are taken individually do not constitute any statistical
data and do not serve any purpose for any statistical enquiry.
3. Statistical laws are not exact: It is well known that
mathematical and physical sciences are exact. But statistical
laws are not exact and statistical laws are only
approximations. Statistical conclusions are not universally
true. They are true only on an average.
4. Statistics table may be misused: Statistics must be used
only by experts; otherwise, statistical methods are the most
dangerous tools on the hands of the inexpert. The use of
statistical tools by the inexperienced and untraced persons
might lead to wrong conclusions. Statistics can be easily
misused by quoting wrong figures of data. As King says

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 aptly ‘ statistics are like clay of which one can make a God or
Devil as one pleases’ .
5. Statistics is only, one of the methods of studying a
problem:
Statistical method do not provide complete solution of the
problems because problems are to be studied taking the
background of the countries culture, philosophy or religion
into consideration. Thus the statistical study should be
supplemented by other evidences.

Exercise – 1

I. Choose the best answer:

1. The origin of statistics can be traced to
(a) State (b) Commerce
(c) Economics (d) Industry.
2. ‘ Statistics may be called the science of counting’ is the
definition given by
(a) Croxton (b) A.L.Bowley
(c) Boddington (d) Webster.

II. Fill in the blanks:

3. In the olden days statistics was confined to only _______.
4.Classification and _______ are the two methods that are
used to condense the data.
5. The analysis of time series and regression analysis plays an
important role in _______.
6.______ is one of the statistical tool plays prominent role in
agricultural experiments.

III. Answer the following questions:

7. Write the definitions of statistics by A.L.Bowley.
8. What is the definitions of statistics as given by Croxton
and Cowden.

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 9. Explain the four stages in statistics as defined by Croxton
and Cowden.
10. Write the definition of statistics given by Horace Secrist.
11. Describe the functions of statistics.
12. Explain the scope of statistics.
13. What are the limitations of statistics.
14. Explain any two functions of statistics.
15. Explain any two applications of statistics.
16. Describe any two limitations of statistics.

IV. Suggested Activities (Project Work):

17. Collect statistical informations from Magazines, News
papers, Television, Internet etc.,
18. Collect interesting statistical facts from various sources
and paste it in your Album note book.

Answers:

I. 1. (a)
2. (b)

II. 3. State affairs

4. Tabulation
5. Forecasting
6. Analysis of variance (or ANOVA)

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