It has been said above that Statistics is a body of procedure and technique used to collect, present and analyse data for applications in practically every profession today.
Statistical method are widely used in Economics, for instance, in assessing the impact of economic policy change e.g. taxation and wage policy changes in testing the efficiency of alternative production techniques, in conducting econometric research in comparative study of different economies etc, statistical method application. For instance, an economist needs to assess the impact of a proposed change in sale taxes in the given community in terms of consumer buying pattern for different categories of consumers through field research. Such determination will include interview with samples of consumers in each major geographical area and in each income category. As another example, consider an economic study which seems to identify appropriate mechanism for determining income wage and to trace the economic consequences of such a wage. Such a study will invariably involve the use of data gathering to presentation and analysis using statistical method.
In the business world, the decision-making with differing occurrence aided by specifically determined conclusion. Such conclusion evolves out of statistical inferences. For instance, consider an auditor verifying the financial record of a firm. Investors need such financial information to aid their investment decision. Likewise, manager of the firms also needs such information for operational guidance. To an auditor, it may not be possible to verify the accuracy of every account receivable, the auditor therefore selects a sample of accounts based on the techniques of Statistics and from the sample results either accepts the accuracy of the stated amount of account receivable or continues with further sampling.
As another example, let us consider the work of a quality control manager of a firm. To ascertain whether or not the required quality standards are met, it is practically impossible to examine every possible product (sometimes thousands or millions of these products are produced). To accomplished the quality control objective, the production or quality control manager may have to test samples of the product and as a result of such test make decision whether or not to make changes in the production process. Tested samples need to be selected by the use of statistical method.
Consider again the introduction of a new product to the market by a firm’s marketing manager. As a first step, the marketing manager could give a sample of the product to consumer for their use and evaluation. As another step by full-scale marketing, she could carry out test marketing in limited geographical area and then analyse the result using statistical method to determine the likely level of demand.
As a further explanation of the use of Statistics in business, we consider the introduction of a new training program by a firm personal manager. Before implementing the program throughout the coy, the personal manager will have to present the program to representative group e.g. or sales personal and evaluate the result in comparison with other training and development method. The process of choosing the representative group as well as that of result evaluation both involve the use of the knowledge of Statistics.
The knowledge of Statistics also finds application in other social sciences. The Sociologists find the knowledge of Statistics useful in analysing the result of a broad rehabilitation program. For instance, industrial psychologist could use the knowledge of Statistics to examine workers responses to plant environment. The political scientist also could use statistical method of analysis to forecast voting pattern.
In summary statistical techniques provide useful means of informed and unbiased decision-making in the face of uncertainty in Economics, other social sciences and other fields such as Medicine, Agriculture, Biological Sciences and the Physical Sciences. Indeed, the knowledge of the subject Statistics enables us to get a picture of a problem where precise measurements or observations are difficult to make or where events are not easily predictable.
