Statistics and economic data

Economists do not only think; they look at facts. Facts about the economy are called economic data. By studying them, economists find the causes of economic problems, and then design policies (measures) to solve them.

Statistics is the subject that deals with the collection, analysis, interpretation and presentation of numerical data.

Data are of two kinds:

• Quantitative data are measured in numbers: the output of wheat in tonnes, a family's monthly income in rupees, the price of petrol.
• Qualitative data describe attributes (qualities) that cannot be measured directly: gender, whether a worker is skilled or unskilled, whether a person is honest. They can often be stated in degrees (good, better, best), or given scores, the way a report card turns performance into marks.

Economics uses both kinds.

Statistical work moves through clear steps:

• Collect the data.
• Present them clearly, in tables, diagrams and graphs.
• Summarise them with a few figures, such as the mean, variance and standard deviation.
• Analyse and interpret them, to draw conclusions.

For example, the government records the output of rice in India every year. Comparing the figures across the years shows whether production is growing fast enough for the country's needs, and that helps decide farm policy.