Chapter 1: Introduction to Business Statistics

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Chapter 1: Introduction

1. Origin of Statistics:

The word Statistics seems to have been derived from Latin word ‘Status’, German word ‘Statistik’ or Italian word ‘Statista’. Each of these means “Political State’. In ancient time governments used to collect the information regarding the population & the property of the State. In India an efficient system of collecting official and administrative statistics existed even more than 2000 Years ago, in particular, during the period of Chandra Gupta Maurya (324 – 300 BC). From Kautilay’s Arthashastra it is known that even before 300 BC a very good system of collecting Vital Statistics and registration of Births and Deaths was in vogue. Raja Todormal (1556-1605 AD), the land & revenue minister of Akbar, maintained good records of Land and Agriculture Statistics. In Germany, the Systematic collection of official statistics originated towards the end of 18th century. They collect data to have an idea of the relative strength of different German states, information regarding population, output of Industrial & Agricultural sector.

In England

Statistics were the outcomes of Napoleonic war.

Vital Statistics Originated at 17th century. Captain John Graunt (of London) (1620-1674) – Father of Vital Statistics, the first man who studied about the statistics of Births & Deaths. Computation of mortality tables and the calculation of Expectation of life of different ages by a number of persons, viz. Casper Newman, Sir William Petty, James Dodson, Dr. William Price. In 1698, the first Life Insurance was found in London.

2. Developments of Statistics:

The theoretical development of so-called modern Statistics came during the mid 17th century with the introduction of ‘Theory of Probability’ and ‘theory of Games & Chance’. The chief contributors are being Mathematicians & Gamblers of France, Germany and England.

Problems of Points – The France Mathematician Pascal (1623-1662) after long correspondence with another France Mathematician P. Fermat (1601-1665) solved it. That was posed by a gambler Chevalier de Mere. This study was the foundation of the theory of probability, which is the backbone of the modern theory of Statistics.

Franchis Galton (English man) - The pioneer of Regression analysis & Normal Distribution.

Karl Pearson (Founder of the greatest Statistical Labouratory in English) – The pioneer of Correlation analysis, & Chi-square test, which is the most important in modern test of Significance. Bernoulli Distribution: Introduced by James Bernoulli.

Student’s t- distribution: Discovered in 1908 by W. S. Gosset (Psedonym - Student’s). Sir Ronald A. Fisher (1890-1962) – Known as the Father of Statistics. He placed Statistics on a very sound footing by applying it to various diversified fields, such as; Genetics, Biometry, Education, Agriculture, etc.. He is the pioneer in introducing the concept of Point Estimation. 3. Definitions of Statistics:

Different authors have defined statistics differently from time to time. The reasons for a variety are primarily two.

Firstly: In modern times the field of study of Statistics has widened considerably. In ancient time it was confined with only the affairs of the state but now it embraces almost every sphere of human activity. Hence a number of old definitions which were confined a very narrow field of enquiry were replaced by new definitions.

Secondly: Some writers defined it as “statistical data” i.e., numerical statement of facts, while others define it as a “statistical method”, i.e., complete body of the principles and techniques used in collecting and analyzing such data.

Some important definitions are:

Statistics as Statistical data

Webster defined Statistics as “Classified facts representing the conditions of the people in a state…….. especially those facts which can be stated in numbers or in any other tabular or classified arrangements”.

Bowley defined Statistics as “numerical statement...
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