(vi) Statistics in distribution

Q5. Discuss the importance of statistics in Economic Business

Ans. Statistics in Economic Business: Statistics play a very important role in major business
activities.

(i) For estimating market demand

(ii) For production planning according to market demand
(iii) Market research is based on statistics
(iv) For Trade policy
(v) Important for the detailed analysis of the money transactions in the business.

Q6. Explain the limitations of statistics.

Ans. Limitation of Statistics ;

(i) Study of numerical facts only: Statistics are numerically expressed. It can be used for
measuring quantitative data only.
(ii) Statistical results are true only on average : Statistical lows are not exact like laws
natural sciences are exact as their result are universally true.
(iii) Statistics does not deal with individuals: Statistics deals only with aggregates of facts
and no importance is attached to individual.
(iv) Without reference, results may prove to be wrong.
(v) Can be used only by the experts: Statistical methods are most dangerous tools in the
hand of inexpert. The techniques of the statistics are not so simple to be used by
anyone.
(vi) Homogeneity of data is essential : Data must have the quality of the uniformity
homogeneity to make data comparable.
(vii) Statistics can be misused: Statistics can be misused, if statistical tools not used
rightly. Result can be manipulated according to suitability.

2. COLLECTION OF DATA
Collection of data is the first important aspect of statistical survey.

Data – Information which can be expressed in numbers.

Two sources of data –

(1) Primary Sources of data:- ‘Data originally collected in the process of investigation are
known as primary data’

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(2) Secondary Sources of data:- ‘Secondary data are those which are already in existence, and
which have been collected, for some other purpose than the answering of the question in hand.’

Primary Data Secondary Data

Basic of Difference

Originality These are original data. These are not original but
already collected by some other
person for institution.

Expenditure More time, money and labour is Less time, money and labour is
required. required.

Precaution More precautions are required Less precaution is required

while collecting these data. while collecting these data.

Editing No need of editing for these data. Editing is required.

Principal Differences between Primary and Secondary Data

1. Deference in Originality.
2. Difference in Objective
3. Difference in cost of Collection

METHODS OF DATA COLLECTION

Methods / Sources of Collection of Primary Data :

(1) PERSONAL INTERVIEEWS
(i) Direct Personal Investigation
(ii) Indirect Oral Investigation
(iii) Information from correspondents
(2) INFORMATION THROUGH QUESTIONNAIRES AND SCHEDULES
(i) Mailed questionnaire
(ii) Questionnaire filled by enumerators
(ii) Telephonic interviews
(1) PERSONAL INTERVIEEWS
(i) Direct Personal Investigation:- The direct personal investigation is the method by
which data are personally collected by the investigator from the respondents.
Merits:- (i) Originality
(ii) Accuracy
(iii) Reliability
(iv) Uniformity (v) Elastic
Demerits:- (i) Difficult to cover wide areas

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(ii) Costly
(iii) Limited coverage
(iv) Personal bias

(ii) Indirect Oral Investigation:- ‘ Indirect oral investigation is the method by which
information is obtained not from the persons regarding whom the information is needed’
It is collected orally from other persons who are expected to possess the necessary information.
Merits: (a) wide coverage
(b) Simple
( c) Expert opinion
(d) Free from bias
(e) Less expensive

Demerits:- (a) Less accurate

(b) Doubtful conclusions (c) Biased

Difference between Direct Personal Investigation and Indirect Oral Investigation

Direct Personal Investigation Indirect Oral Investigation

(1) Investigator establishes direct contact with (1) Contacting other than those about whom
the respondents information is sought
(2)Possible only when the field of investigation (2) Field of investigation is relatively large.
is small.
(3)Investigator must be well versed in the (3)No such requirement.
language and cultural habits of respondents.
(4)Relatively costlier. (4)Less costlier.
(iii)Information from local sources or correspondents :- The investigator appoints local
correspond at deferent places. They collect information in their own way and furnish the same to
the investigator.

Merits:- (a) Economical

(b) Continuity
( c) Wide coverage
(d) Suitable for special purpose
Demerits:- (a) Loss of originality
(b) Lack of uniformity
(c) Less accuracy
(d)Personal bias
(e) Delay in collation.
(2) INFORMATION THROUGH QUESTIONNAIRES AND SCHEDULES
(i) Mailing (Questionnaire) surveys:- Questionnaires are mailed to the respondents. A letter is
attached with the questionnaire giving the purpose of enquiry. The respondent notes the
answers against the questions and returns the completed questionnaire to the investigator.

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 Advantages Disadvantages
1) Least expensive Long response time
2) Only method to reach remote areas Cannot be used by illiterates.
Doubts cannot be cleared regarding
3) Informants can be influenced questions

(ii) Enumerator’s Method:- Questionnaire is prepared according to the purpose of enquiry. The
enumerator himself approaches the respondent with the questionnaire. The questionnaires which
are filled by the enumerators themselves by putting questions are called schedules.
Merits:- (a) Wide coverage (b) Personal contact
(c) Accuracy (d) Completeness
Demerits:- (a) Expensive (b)Time consuming
(c) Availability of enumerator (d) Partial
Telephonic interviews:- This mode data collection, the investigator seeks the desired
information from the respondents over the telephone.

Advantages Disadvantages
1) Relatively low cost Limited use
2) Relatively high response rate Reactions cannot be watched
3) Less influence on informants Respondents can be influenced
Qualities of good questionnaire
(a) Limited question
(b) Simplicity
(c) No undesirable questions
(d) Proper order of the questions
(e) Calculation
(f) Instructions
(g) Cross verification
(h) Request for return.
Types of question:- (a) Simple alternative question
(b) Multiple choice questions
(c) Open question
(d) Specific information question
Two main sources of secondary data:
(1) Published sources
(2) Unpublished sources
(1)Published sources:- (i) Government publication
(ii) Semi -government publication

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(iii) Publication of research institutions
(v) Report of committees and commissions
(vi) Publication of research scholars
(vii) Journals and papers
(viii) International publication
(2)Unpublished sources:-There are some unpublished secondary data as well. These data are
collected by the government organisations and others, generally for their self use or office record.
These are not published .These unpublished numerical information may, however, be used as
secondary data.
Precaution in use of secondary data :- (i) Ability of the collection organization
(ii) Objective and scope
(iii) Time and conditions of collection
(iv)Accuracy
(v)Method of collection

Two important sources of secondary data

(i) Census of India

(ii) Report and publication of national sample survey office (NSSO)

CENSUS AND SAMPLE METHOD OF COLLECTION OF DATA

CENSUS METHOD
‘Census method that method in which data are collected covering every item of the universe or
population relating to the problem under investigation’.
Merits:- (1) Reliable and Accurate
(2)Extensive information (3) Study of complex investigation
(4)Indirect investigation (5) Study of diverse characteristics
Demerits:- (1) Large manpower (2) Costly
(3) Not suitable for large investigation
SAMPLE METHOD
‘Sample method is that method in which data is collected about the sample on a group of
items taken from the population for examination and conclusion are drawn on their bases’.
Merits:- (1) Economical
(2) Time saving (3) Large investigation
(4) More scientific (5) Identifications
Demerits: (1) Partial

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 (2)Difficulty in selecting representative sample
(3)Wrong conclusions (4) Specialised knowledge

Random sampling:-‘Random sampling is that method of sampling in which each and every
item of the universe has equal chance of being a selected the sample’. There is an equal
probability for every item of this universe being selected in the sample.
Random sampling may be done any of the following ways:
(i)Lottery method (ii) Tables of random numbers
Merits: (i) Free from personal bias
(ii)Each and every item of the universe stands equal chances of being selected.
(iii) The universe gets fairly represented by the sample.
Demerits: (i) Random sampling does not give weightage to certain important items in the
universe.
(ii) This method does not guarantee proportionate representation of deferent items in the
universe.

(2) Non- Random Sampling

(i) Purposive Sampling : ‘Purposive sampling is that method in which the investigator himself
makes the choice of the sample items in which in his opinion the best representative of the
universe’.
Merits: (a) Flexible (b) Simple technique
(c) Selection of items can be deliberately tuned to purpose of study.
Demerits: (a) Possibility of Personal bias
(b) Reliability of results becomes doubtful.
(ii) Mixed Sampling: ‘According to this method of sampling, population is divided into
different strata having different characteristics and some of the items are selected from each
strata, so that the entire population gets represented’.
Merits:- (a) Comparative analysis
(b) Reliable (c) Diverse characteristics
Demerits: (a) Suitable only when there is a complete knowledge.

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(b) Possibility of bias at the time of classification of the population into different parts.
(iii) Systematic Sampling :- ‘ Units of the population are numerically, geographically and
alphabetically arranged. Every items of the numbered items is selected as a sample item’.
(iv)Quota Sampling:- In this method, the population is divided into different groups or classes
according to different characteristics of the population’
(v)Convenience Sampling:- In this method, sampling is done by the investigator in such a
manner that suit his convenience’
Reliability of sampling data
(1) Size of the sample
(2) Method of sampling
(3) Training of enumerators
(4) Bias of correspondents and enumerators
Difference between census method and sampling method.

Census Method Sampling Method

1) Every unit of population studied 1) Few units of population are studied
2) Reliable and accurate results 2) Less Reliable and accurate results
3) Expensive method 3) Less expensive method
4) More time consuming 4) Less time consuming
5) Suitable when population is of 5) Suitable when population is of
homogenous nature heterogeneous nature
. Statistical Errors:
Sampling errors:- These are related to the size or nature of the sample selected for the study.
Due to a very small size of the sample selected for study or due to non-representative
nature of the sample, the estimated value may differ from the actual value of a parameter.
For example: if the estimated value of a parameter is found to be 10 while the actual/true
value is 20then, the sampling error is 10-20= -10.

Non-sampling errors: Errors that accurate the stage of collecting data.

Types of non-sampling errors:
a] Errors of measurement due to incorrect response.
b] Errors of non-response of some units of the sample selected.
c] Sampling bias occurs when sample does not include some members of the target
population.

MCQ
Q 1. A questionnaire is

(a) A list of answers

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