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Importance of Statistics in Economics

In ancient times, statistics was regarded as the science of statecraft and was used to collect information related to military force, population, wealth, etc. But in modern times, the use of statistics is broad. It is not only the device for collecting sound techniques for handling analysis and drawing valid conclusions. Statistics play a significant role in the solution of problems related to planning, economics, business, management, mathematics, etc. The importance of statistics in economics are as follows:

1. Helpful in calculating PCI:
Statistics help us to calculate the PCI. PCI is one of the component of NI in economics. It is accounted for by the help of NI and the size of the population. Thus, statistics help us in calculating PCI.

2. Helpful in analyzing consumer’s satisfaction:
The statistical tools help the particular economy to analyze and make a scientific and systematic report of consumer’s satisfaction. It helps in finding out the information about the consumer. So the degree of consumer’s satisfaction can be measured by the numerical evidence with the help of statistics.

3. Helpful in production functions:
The relationship between the various factors of input and output is termed as production function. In fact, such a production function is evaluated by the help of various statistical tools.

4. Helpful in income employment generation programme:
It also helps in income employment generation programme through time series analysis and regression analysis which serves as the major tool of economics.

5. Helpful in formulating economic policies:
The various statistical tools help in the formulation of economic policies. In fact, economic policies such as fiscal policies and monetary policies are determined by the help of statistics.

6. Helpful in analyzing the relationship between economic variables and economic development:
Economic development means the growth of GNP along with the development of different aspects. Thus, statistics analyzes the relationship between economic variables and economic development.