importance of statistics essay

importance of statistics essay

The Importance of Statistics: A Comprehensive Analysis

1. Introduction to Statistics

We need to be able to analyze the information in a formal and statistically rigorous way to formulate conclusions and hypotheses. The branch of mathematics that provides tools for these activities is probability and statistics, respectively. Probability refers to the measure of the likelihood of an event occurring. Understanding of the theories is needed in order to make use of these tools properly. Probability theory needs more background in set theory and calculus, whereas statistical methods are available to a larger audience. With an understanding of statistics, one will be able to grasp the meaning and the important messages from everyday experiences.

We are confronted with uncertainty in our everyday lives as we face the future. Rarely can we predict the future, even to a limited extent. Most of the time, we observe or assess the likelihood of events using the information at hand. This information is accessible from a wide variety of sources, such as scientific results, social trends, governmental reports, and media stories, laws of nature learned in physics and chemistry, the qualities of products and services, poll results, and professional expertise, stories or folklore. Frequently, the quality associated with the likelihood of an event, its probability, is unclear. In view of this uncertainty, it is important to acknowledge our slipshod intuition, to use clear thinking when evaluating observations, and to think critically about the sources of information.

2. Applications of Statistics in Various Fields

Statistics is an essential science. It enables people to make effective decisions in the presence of uncertainty. Statistics is concerned with all aspects of human experience. One potential way to introduce statistics in a more pleasant and ethical manner is to expose the students to numerous field sites and world-oriented statistics problems. It would be beneficial to students if they could be specific and accustomed to the fact that statistics is a helpful tool that people in different fields, not only in finance or industrial engineering, use to make informed decisions. Data can be obtained from real-life situations that are interesting to students and relevant to the world outside of the text. Such examples enable students to make reasonable assumptions based on their prior knowledge. With this outcome in mind, specific applications may be used effectively to foster learning, encourage critical thinking, and enhance the assessment of students.

Being a researcher, it is very important for us to know about the applications of statistics. It is influential in every sphere of human activity. Statistics plays a crucial role in almost every field of human activity. Learning about statistics plays an essential role in developing a clearer and well-defined viewpoint and opinion. It’s inevitable to dismiss the statistics knowledge in any field of activities. Now, we shall take a look at a few applications of statistics:

3. Statistical Methods and Techniques

In addition to these tests, it is interesting that undergraduate students often use too many nonparametric tests based on some assumptions or variances in their theses because they cannot provide the same normal presumption of the parametric tests. However, the main objective of the standard normality tests is not just examining the normality type of any sample to compare the distributions of two groups, and many other statistical tests are more beneficial in case of existing unequal variances. Therefore, contrary to what is commonly believed, nonparametric tests have a slightly different structure than those of parametric tests; they lose power in cases where the equal variance criterion is satisfied. These tests are not insured to rely on any statistical methods, and they should be considered as a weak guideline to evaluate and weaken parametric tests. However, introductory researchers frequently neglect these criteria, which are covered in the first chapters of statistics books. This is mostly because there is almost always a statement such as “if the distribution is far from normal and/or the equal variance assumptions are not satisfied, you can use non-parametric tests” at the end of the related chapters.

One of the most commonly used tests that many social science studies use incorrectly is t-tests. The most important reason for this situation is the fact that the assumptions of the t-test are not examined and misapplied. Another point where the t-test is misapplied and misinterpreted in social sciences is that this test is being applied for many multiple calculations per group. In other words, it is used to compare many alternatives when there are only fifty ordinary students, twenty-five students who go, and twenty-five students who do not go to the library. Multinomial logistic regression, chi-square test, analysis of variance, or some specific techniques related to these methods may be able to be applied for these kinds of research. Conducting a t-test for an observation that has fifty students and is more dependent than the other ones can engender almost unnecessary expenditure of time, effort, labor, and expenses, as well as erroneous and misleading results. Thus, while applying the t-test, it is necessary to pay attention to the given assumptions of the related test, and huge importance must be attached to the warnings that previously mentioned studies suggest.

4. The Role of Statistics in Decision Making

Though recognized for many years, the actual decision-making process has been subject to relatively little investigation, and investigation into the use of statistics in the decision-making process seems even scarcer. This is somewhat surprising when one notes not only the long tradition of applications of statistical techniques to quality control problems, to production control, and to the management of inventories in the industrial sector but the strong tradition of statistical applications for some of the newer management functions in the so-called service sector. Such applications of statistics are well documented in many fields, but frequently the reporting vehicle is the applied journal. It is our suspicion that the field of applied statistics occupies such a relatively low-profile status on most academic campuses because the most accessible research outlets are applied journals that are not well recognized as first-class research outlets.

Hypotheses, estimations, predictions, and decisions are the four tasks constituting the major purposes of statistics. The roles of information systems in relation to a decision-making function have been well documented in information system literature. The focus in these papers, however, is on models or computer support systems for decision-making and the decision-making process itself. The conceptual underpinnings of statistics and its uses can also be found in many texts. Statistics is often described as having as its goal the alleviation of entropy or uncertainty. This seems not just another definition, but the basic reason why management, or for that matter any other discipline to which statistical methodology is applied, turns to statistics.

5. Future Trends and Innovations in Statistical Analysis

(2) The emphasis on very large or very small quantities has created a demand for methods of extreme value estimation of distribution parameters. An example of the former is the challenge to determine whether increasing carbon dioxide production may result in increasing world temperatures. An example of the latter is the understanding the importance of rare but dangerous diseases, such as lung cancer among non-smokers.

(1) The computer revolution is not over yet. The use of more and more powerful computers is becoming a more and more important part of the practice of science. Certain statistical techniques, which would have been considered by many almost impossible to carry out a few years ago (e.g. confidence estimators in factor analysis), are now becoming standards.

It is obvious that statistics can and has been used for the betterment of society. It is fair to ask how statistics may be of more use in the future. Here are several trends in contemporary society which will have an effect on the future of statistics: