Importance of Statistics

Statistics helps the government of a country fulfill different objectives by letting them collect, organize, present, analyze, and interpret a piece of large information in numerical figures. With this, the government can efficiently run the economy and fulfill welfare and other objectives.
The government of a country can also formulate various economic policies by using statistical methods like index numbers, forecasting and demand analysis, time-series analysis, and many more.
In democratic countries like India, different political groups take the help of statistics to know about their popularity among the masses.

Statistics help in formulating different economic laws such as the Law of Demand, Law of Supply, Elasticity of Demand, Elasticity of Supply, etc., were developed using the inductive method of generalization.
An economy faces different economic problems such as unemployment, poverty, etc. Statistics, with the help of different techniques and tools, help an economy understand and solve these economic problems efficiently.
An economy includes different market structures such as perfect competition, monopoly, oligopoly market, etc. For better results and functioning, the study of these market structures is essential. Statistics help in the study through the comparison of the cost, profits, and prices of the firms.
An economist can also estimate a mathematical relationship between the different variables of economics.
Ultimately, statistics helps study the behavior of different concepts of economics. For example, the laws of supply and demand are used to understand the behavior of consumers toward the purchase and usage of a commodity or service by considering different determinants of supply and demand.

Statistics provide different guidelines and tools to know the feasibility, location, inputs availability, taxes, size of output, turnover, market size, etc., before establishing a business.
A businessman can estimate the demand for their service or product with the help of different statistical methods such as trend analysis, etc.
Statistics also help a business in the production planning process to ensure a proper balance between the supply and demand for a good or service offered by the firm.
Different statistical techniques help a business in the analysis of purchasing power, consumer wants, pricing, population, etc., to understand the potential of the target market for its service or product.

Statistics for Economics | Functions, Importance, and Limitations