what is statistics

What is Statistics?

Learn about Statistics with Jennifer Lopez
Marry Me 2022

Case breakdown: Movie Marry Me

The scene from the movie shows Kat (played by Jennifer Lopez) and Charlie (played by Owen Wilson) having a conversation about marriage. Charlie quotes some percentages to prove his point that marriages don’t work. He says that 48% of marriages end up in divorce and Kat counters by saying 52% work. Charlie continues to say that if one gets married a second or a third time, this percentage increases. Their conversation is laden with statistics.

In this blog, Learning Perspectives will explore the meaning of Statistics.

What is Statistics?

According to the English dictionary, the word statistics refers to the information based on the study of something happening a number of times. Statistics consists of four stages namely, I) Collection of data, ii) presentation of data iii) Analysis of data, and iv) Interpretation of data. Statistics are used to analyze data so that one can base decisions on them.

The ways in which the statistical data is analyzed are called statistical methods. It is funny how Kat mentions ‘Marriage is like a math problem, one doesn’t give up on it till one gets it right.’ The mathematical theory which is the basis of these methods is called the theory of Statistics.

Statistical methods are used across organizations especially government bodies, research agencies & business firms for forecasting, controlling, and exploring. There is a debate around the issue of whether Statistics is a Science or an Art. Statistics gives out facts objectively without being vague.

Statistics presents facts in a definite form and simplifies complex problems. An example of this could be ‘the number of females per 1,000 males has increased from 991 in 2015-16 to 1,020 in 2019-21.

The above statistic indicates the number of females has increased from 15-16 to 19-21. These statistics also help in comparison and predictions too. Statistics pervade every area of business and Management. Many decisions can be made on the basis of statistics such as the following:

Marketing

This deals with understanding the product or service that needs to be sold to the target audience. During the marketing of the product, it is crucial to understand how many of the target audience is willing to purchase the product. These statistics can be gauged through surveys, questionnaires, etc. An analysis of the population, purchasing power, habits, competition, etc. would help in understanding the market.

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Finance

Finance is generally driven by large numbers and is dependent on a statistical analysis of facts and figures. Portfolio decisions, investments, financial forecasting, and breakeven analysis are done through statistical models.

Banking

The banking business is affected by trends more than any other business. Hence, it needs to establish departments within its organization for the purpose of gathering information and analyzing it. This is done not only for its own business operations but also for general economic conditions.

Research and Development

Many big companies have R&D departments that are primarily concerned with how the existing products can be improved. New product lines that can be added and how resources can be utilized optimally.

Investments

The investment banker uses statistics generously. It requires the investment banker to have a clear understanding of the money market, security market, and also knowledge of different industries. This is done to accurately distinguish between good and bad securities.

Accounting

Statical methods are also used in accounting. Auditors use statistical sampling and estimation procedures. Financial reporters also use historical costs to conduct analysis.

Although, statistics are utilized in many areas of business and economics too. Using statistics as an argument for marriage seems odd to me. Does this couple defy the statistics on marriage?

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