10 Reasons why Statistics is important

why statistics is important

Before we understand 10 reasons why statistics is important, we need to know that we make daily decisions involving data collection, analysis, and application. A grocer needs to record the number of purchases, sales, and expenses she uses daily to make an informed decision on her profitability index. Similarly, the government has to plan for total expenditure and revenues and focus on future sources of funding. Anyone excited in the discovery world has no option but to employ statistics.

Since it forms an integral part of our daily lives, statistics help in analysis and solution of various problems, from a school head that has to budget for the institution’s expenditure to the cabin crew who have to evaluate the weather conditions before, during and after takeoff. Some of the critical aspects of statistics are discussed below;

Banking institutions

They apply statistics to evaluate the amount using special statistical programs and the number of deposits, the amount borrowed and lent out. They also need to account for their profitability and plan.

Importance of statistics in Insurance Firms

Insurance firms use various statistical models to evaluate the type of risk and amount to be insured. Based on past occurrences, insurers can determine the possibility of similar risk and make informed decisions about premiums to be paid.

Importance of statistics in Meteorological Department

The government use information from the weather department to plan. Using computerized statistical models, the forecasters can compare the past and present conditions to help them make an informed decision about the future.

Importance of Statistics in Medicine

In the medical world, doctors can analyze the rate and method of transmission of a particular disease and how to manage the condition. For example, statistical records are used by doctors to help in the fight against HIV/AIDS transmission.

Zoology

Zoologists are interested in the population of wild animals in given game parks, their common and distinguishing feature and their adaptations to various conditions.

The government may want to determine the population in the country to help in budgeting and resource distribution.

Learning Institutions

Students evaluate their performance based on past statistics. Similarly, lecturers appraise the performance of students based on the previous evaluation tests.

Business

Statistics is used to carry out market research to help make an informed decision on strategies to implement for the sake of the company.

Economy

Factors like inflation, per capita income, rate of inflation and demand and supply of are determined using past information.

Financial Institution

Investors use the borrowers’ records to decide whether the money invested will be paid back. No one would want to fund a loss-making organization.

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