Importance of statistics Essay

Importance of statistics

            Statistics as a discipline is one of the most important tools in decision making and is applied in every day life by consumers, families, suppliers, businessmen and in all academic and professional fraternities. Statistics provides tools necessary to evaluate and intelligently analyze information hence facilitate the process of making informed decisions. For example, if a family uses $100 daily on average for household expenses give or take $20, then they can set their monthly provision for expenditure between $2400 and $3600. In making this decision, the use of measure of center (average) and measure of variation (range) were utilized for the family to smoothen out their cash flow problems and come up with a workable effective budget (Lane, 2003).

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            One advantage of knowledge of statistics is the ability to differentiate between irrelevant information and substantiated information regarding news, information and other areas that need statistical verification in decision making. For example in one article the writer in furthering his/her argument remarked that the problem with statistics is that if one was to put his head in an oven and his/her feet in a fridge then his/her body temperature on average would be optimal (370).

Although this argument is logically correct, the writer ignored the measures of variation and relative standing and thus misrepresented statistical application as a tool that aids decision making. A good example of effective statistical use is forecasting election results. Over the past, statistical projections with regards to election have been over 90% accurate and given the nature of election this shows that statistics if applied correctly has a high degree of accuracy and hence credible.

              Statistics has contributed to the understanding of other disciplines and the vast application of statistics in decision making in every day life; from methodologies used in coming up with the fiscal budget and the modalities used to evaluate budgetary surplus and deficit, calculation of gross domestic product, inflation, analysis to evaluation of relief supplies needed in case of national disasters and even criteria used to declare a drug as effective or a product fit for human consumption (Lane, 2003.)

             As a student of statistics the mathematical aspect of the discipline made me understand and appreciate mathematical theories and problems in the sense that statistics – being a practical application course – uses abstract mathematical models leading to an inner understanding of mathematics. Therefore the course has not only assisted in applying mathematical formulas but has also facilitated the understanding of some of the mathematical models. An example is, before the knowledge of statistics, simple linear models and regression assumptions can only make sense when applied in statistical analysis and forecasting. In addition the use of excel work sheet and SPSS as statistical tools has led to a better understanding in complex statistical calculation like the p value, F-test among others since before using computer aids one must understand the theoretical use and application of this tests.

However, in my opinion one area that has proven difficult is the use of abstract probability in data analysis. The nature and diversity of data used in statistics makes categorizing the data difficult especially when it comes to probability application given its abstract characteristics i.e. there are no defined criteria on data manipulation to fit probabilistic application. For example in analysis of historical oil prices (my last assignment), one challenge was to categorize the data as independent or not and effectively apply Bayes theorem. Therefore application of probability in statistics is still a major challenge, thus more emphasis especially in application of probability models will help students understand and analyze statistical problems more effectively.


Lane, D. (20th June 2003) Importance of statistics. Accessed 10th June 2008 from


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