Application of Statistics in Economics - Economics Notes Grade XI

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Quantitative Analysis In Economics

Application of Statistics in Economics - Economics Notes Grade XI

Application of Statistics in Economics

Statistical aspect is one of the important aspects of quantitative analysis in economics. Economics statistics is a systematic body of knowledge concerned with the application of statistical methods to theoretical economics argument. It is a science that checks the ideas in economies theory with the help of quantitative and historical information and suggests methods of improvements where necessary. In fact, statistical methods are the tools and appliances of an economist’s laboratory.

1) To study the consumption pattern and standard of living
Consumption statistics reveals the pattern of the consumption of the various commodities by different sections of society and also enable us to have some ides about their purchasing capacity and their standard of living.

2) To solve production related economic problems
production statistics are very useful in solving basic economics problems like what to produce, how to produce, for whom to produce, etc. which are arisen due to the scarcity of resources. It also helps in adjusting the market supply to market demand.

3) To study the process of pricing
Exchange statistics reflect upon the process of pricing regarded to maximize profit of business firms or to promote consumer’s welfare.

4) To study the nature and process of income distribution
In the case of distributions how the national income is to be calculated in the distribution of income and wealth, statistics are of immense help.

5) To formulate and evaluate economic policies
A statistical method is very useful to formulate various economic policies like trade policy, taxation policy, industrial policy, etc. They also help to evaluate the effectiveness of these policies. For example, by evaluating the absolute figure of poverty government formulates policies related to poverty alleviation and also checks the effectiveness of these policies to alleviate poverty on the basis of related figures.

6) Means of economic planning
Similarly, statistical methods are methods of economic planning. Statistics helps to evaluate the achievements and problems of the previous plan. Similarly, they help to fix targets and revenue and expenditure statements of the current plan.

7) Basis of economic models and functions
They are also useful to build economic models and functions.

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