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Statistics And The Scientific Method

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The original idea of "statistics" was the collection of information about and for the "state". The word statistics derives directly, not from any classical Greek or Latin roots, but from the Italian word for state.

The birth of statistics occurred in mid-17th century. A commoner, named John Graunt, who was a native of London, began reviewing a weekly church publication issued by the local parish clerk that listed the number of births, christenings, and deaths in each parish. These so-called Bills of Mortality also listed the causes of death. Graunt who was a shopkeeper organized this data in the form we call descriptive statistics, which was published as Natural and Political Observations Made upon the Bills of Mortality. Shortly thereafter he was elected as a member of Royal Society. Thus, statistics has to borrow some concepts from sociology, such as the concept of Population. It has been argued that since statistics usually involves the study of human behaviour, it cannot claim the precision of the physical sciences.

If we knew exactly what was going to happen, when it was going to happen, and to whom it was going to happen, we could prepare for it. Knowing everything makes decision making easy but life less interesting. If Eskom knew how cold it was going to be next winter, it would be simple to plan for the amount of electricity to have available. On the other hand, operating with complete uncertainty is frustrating and often costly. Fortunately, there is a middle ground. Often, we can collect or generate numerical information that, although not eliminating uncertainty entirely, will allow us to learn enough about the underlying situation to perform effectively.

Statistics is the body of methodology concerned with the art and science of gathering, analysing, and using data to identify and solve problems, and to make decisions. Statistical methods should be regarded as valuable tools. They do not replace critical thinking and common sense. However, if used correctly, statistical methods enable us to generate and assemble numerical information in a way that will help us pick out the signals in the fog, make better decisions, and create more rapid improvements in processes and products.

Statistics is a science assisting you in making decisions under uncertainties based on some numerical and measurable scales. It is about obtaining facts from figures, but moreover it is the ability to transform raw numbers (data) into knowledge that can be acted upon. Today's business decisions are driven by data. Statistical skills enable you to intelligently collect, summarise, analyse and interpret data relevant to your decision-making process.

Statistical concepts and statistical thinking enable you to:

  • Represent data in meaningful ways that are understandable by others;
  • Identify functional relationships between variable quantities;
  • Justify decisions on the basis of data: the decision-making process must be based on the data and not on personal opinion or belief.
  • Solve problems in a diversity of contexts. Some would say, particularly from a business perspective, that statistics is the study of variation. Variation can often be summarized in simple graphs. Pictures are often easier to interpret than tables or lists of numbers. Spreadsheet programs can be used to construct familiar displays like bar charts and pie charts. For the former, amounts are indicated by the heights of bars. For the latter, amounts are indicated by the areas of pie slices.