Functions of Statistics

1.  It presents facts in a definite form.
2. It simplifies the mass of figures.
3. It facilitates comparison
4. It helps in formulating and testing the hypothesis

Description of the function of statistics 

A. Definiteness

Numerical expressions are convincing and therefore one of the most important functions are statistics is to present general statements in a precise and definite form. statements or facts conveyed in exact quantitative terms are always more convincing than vague utterances. statistics present facts in a precise and define form and thus help proper comprehension of what is stated. consider, for example, a statement sex ratio (i.e., number of females per 1000 males) is going up in India. The reader would not have a clear idea of the situation from this statement. but if we say the sex ratio has gone up from 927 in 1991 to 933 in 2001, it conveys a defined meaning. similarly, statements like "There is a lot of unemployment in Bangladesh, 'The population of Bangladesh is growing at a  very fast rate,' ' The prices of various commodities are rising,' and 'The number of students seeking admission to professional courses is increasing,' etc., hardly convey and worthwhile information as they do not specify the numerical dimensions involved.

B. Condensation

Not only does statistics present facts in a definite form but it also helps in condensing the mass of data into a few significant figures. In a way, statistical methods present a piece of meaningful overall information from the mass of data. Thus, it is impossible for one to form a precise idea about the income position of the people of Bangladesh from a record of the individual incomes of the entire population. However, the figure of per capita income can be easily remembered by everyone.

C. Comparison

Unless figures are compared with others of the same kind they are often devoid of any meaning. For example, if we say that the production of Keya Cosmetic has increased considerably shall not be meaningful unless some comparison of figures is made. But the statement there has been an increase from 200 products a day in September. 1988 to more than 2000 cars a day in Jan. 2005 definitely indicates the increasing trend in production.

D. Formulating and Testing Hypothesis

Statistical methods are extremely useful in formulating and testing hypotheses and developing new theories. For example, hypotheses like whether chloroquine is effective in preventing typhoid, whether the credit squeeze is effective in cheeking price increases, whether students have benefited from the extra coaching, etc., can be tested by appropriate statistical tools.

E. Prediction

Plans and policies of organizations are invariably formulated well in advance of the time of their implementation. Knowledge of future trends is very helpful in framing suitable policies and plans. Statistical methods provide helpful means of forecasting future events. For example, if a businessman has to decide how much he should produce in 2005, he would like to know the expected sales for that year. He may use his subjective judgment and make a guess. However, a better method for him would be to analyze the sales data of the past years or arrange a statistical survey of the market to obtain the necessary data for estimating the sales volume for the year 2005.

F. Formulation of Policies

Statistics provide the basic material for farming suitable policies. for example, it may be necessary to decide how much oil a nation should import in 2005, the decision would depend upon the expected internal production and the likely demand for oil in 2005. In the absence of information regarding the estimated domestic output and demand for oil, the decision on imports cannot be made with reasonable accuracy.

Robert W. Burgess has beautifully summed up the functions of statistics "The fundamental gospel of statistics is to push back the domain of ignorance, rule of thumb, arbitrary or premature decisions, traditions, and dogmatism and to increase the domain in which decisions are made and principles are formulated on the basis of analyzed quantitative facts"