How Statistics Is Applied in Our Everyday Life and Why It Is Useful - Coursework Example

INTRODUCTION We are daily subjected to statistical data in the media, journals and other forms of mass communication. When interpreted correctly, these statistical data have a significant meaning about a phenomenon that affects our lives. It could be data on weather, data about volcanic activity on an active mountain etc. Therefore, it is important that we gain understanding of statistic because it affects us daily. Statistics is used in marketing, monitoring, policy development, planning of services and internal research purposes. Users of statistics are governments, research institutions, analysts and researchers, journalists, businesses, educational institutional and the general public. The truth is that few of us pay attention to these statistics that seem hard to understand, let alone to interpret. Most people are interested in statistics about presidential candidates to determine who is more popular and likely to win. Nevertheless, some knowledge on statistic is helpful to us, not just for academic purposes but also to help us make important decisions in our lives. DEFINITION OF STATISTICS AND OTHER RELATED ISSUES. Statistics is defined as a branch of applied mathematics which is concerned with the collection and interpretation of quantitative data, and the use of probability theory to estimate population parameters. It can also be defined as a type of mathematical analysis involving the use of quantified representations, models and summaries for a given set of empirical data or real world observations. Vander (208) referred to it as a general term used to summarize a process that an analyst, mathematician or statistician can use to characterize a data set. If the data set is based on a sample of a larger population, then the analyst can extend inferences onto the population based on the statistical results from the sample. There are two major categories namely descriptive and inferential. Descriptive statistics are techniques used to review and make sense of a set of observations. They are typically presented graphically, in tabular form or as summary statistics. Descriptive statistics can only be used to describe the group that is being studied, and the results cannot be generalized to any larger group (Dodge 301). Inferential statistics are procedures that allow researchers to generalize observations made with samples to the larger population from which they were selected. This is concerned with making predictions about a population from observations. Examples include linear regression and correlation analysis. HOW STATISTICS IS APPLIED IN OUR EVERYDAY LIFE AND WHY IT IS USEFUL. When used correctly, statistics tell us trends on what happened in the past and can be useful in predicting what will happen in the future. Use of statistics in tackling criminal activities. Police around the world in most countries release reports on crimes, mostly annually. These reports give information on whether crime has reduced or increased over the past year. Crime statistics is collected from records compiled by the police, household survey and hospital or insurance records. When people fall victims of criminal activities, they report to the police who record them down. From the number of reports they receive, they can make conclusion about the frequencies of the crimes, the type of crime and finally be able to come up with conclusive crime rates. The area where the crime occurred is important because it helps in indicating the crime prone areas. After analyzing the data they have, the police make conclusive report which they often release to the public. The crime rates are useful in determining whether crime has reduced or increased between two relevant periods. The crime rates reported in different cities help tourists know which precautions to take while visiting these cities, and also which places to avoid while there. Political Campaigns and Statistic During campaign periods, the media seeks to know what the public thinks about policies as well as candidate. Polling research companies carry out a survey on a sample of voters on their preferred candidate. The population in the sample helps to generalize the preference of the entire population. This is very useful to the candidates because it shows them the issues that matter to the electorates and how to handle them. The findings of these polls also divide the population into different regions that can be considered strongholds of various candidates. A candidate can therefore plan and decide which regions to give more time while campaigning. Poll results also put into perspective the different issues in those regions. The polls also help undecided voters make up their mind, and most likely they vote for a candidate that is likely to win. According to Dodge (256), data can be skewed to suit a certain group’s agenda. Therefore, caution should be exercised before believing any report that is released about campaigns, because some groups would out to cheat the public that their preferred candidate is winning. Statistics and demography Statistics about different aspects of the population is collected often after certain periods of time. Census conducted in a country helps planners make conclusions on the population size. From the census, the total number of people in a country is known. Such figures are used to calculate the dependency ratio in a country. It also shows what percentage of the population is made up of young people. Statistics about births and deaths in a country is used to make inferences about death rate and birth rates in a country. These are also used in calculating the annual population growth rate. Ferranti and Corti (431) argues that statistics about the health of the population is used in calculating life expectancy at birth by sex, life expectancy at age 60 by sex, maternal mortality and infant mortality, total fertility rate etc. Health statistics will help in estimating number of adults living with HIV/AIDS and will show women’s share of adults living with HIV/AIDS. Such reports are important to individuals and the government, high rates of HIV/AIDS calls upon government intervention to provide measures to reduce the high prevalence, for example they would encourage the use of protection among the sexually active. This will reduce the prevalence of HIV/AIDS in the population. If the population growth rate is high, like it is in most developing countries, governments in these nations have adopted measures to encourage the use of contraceptives among women. For example, the contraceptives are offered free of charge in government facilities. Also, in aiming at reducing infant deaths caused by malaria, governments offer malaria treatment free of charge and have embarked on a campaign to distribute treated mosquito nets free of charge in areas where malaria is prevalent. The awareness raised about these diseases triggered the appropriate response from the government, and these would not be possible were it not for the statistics recorded. Statistics and economics Balance Of Payments (B.O.P) is a statistical record of all economic transactions that have taken place during a given time period usually one year, between a country’s residence and the rest of the world. In simple terms, it is a listing of receipts and payments in international transactions for a given country. The main purpose of statistic in B.O.P is to assist governments in formulating monetary, fiscal and commercial policies. Banks, businesses and even scholars interested in international trade and finance find these statistics about B.O.P very useful. Items recorded include imports, gifts sent out of the country, repatriated earnings of foreign investments, investments made in foreign countries by a country’s residents, exports, and gifts from abroad into the country’s resident, incomes to residents from investments from abroad, and inflows of foreign investments into the home country. Statistics is used to collect and record consumer behavior which is used to compute Consumer Price Index (CPI). The CPI is an indicator of changes in consumer prices experienced by a country’s residents. It is obtained by comparing the cost of a fixed basket of goods and services purchased by consumers over time. The CPI is used in determining inflation rates in a country. Inflation is very important to observe in the economy. Bankers observe inflation because they include inflation in determining the interest rate that they will charge on loans. If they expect inflation to rise they will increase their interest rate. CPI is used to adjust for the effects of inflation in finding the real values of wages, salaries, and pensions (Freedman 102). Statistic in Finance Statistic is very important in finance. It is used in analytical methods for risk management, statistical modeling for online auctions, ranking and selection in mutual funds, uses of Black-Scholes formula in finance, and data mining in predictions markets. Statistics is used in trend analysis and correlation when making economic forecasts. Statistic use in weather forecast We all watch weather forecast everyday so as to know how the weather will be in future. If the weather forecast says it will rain tomorrow, people will carry umbrellas as they go out and also dress warmly. On the other hand if the forecast predicts it will be sunny, people will dress in bright and light clothes appropriate for the weather. Farmers are also keen on the weather forecast to know when the season is changing. If the time for rains arrives, farmers prepare to plant. They are also keen to know if the rains will be so heavy as to cause flooding, or the rains will be little that they have to irrigate their farms. Vander affirms that weather models are used to arrive at conclusions about the weather (117). These computer models are built using statistics that compare prior weather conditions with current weather to predict future weather. These predictions are important to all of us because they help us make proper decision about our lives. If the forecast indicates that a hurricane or a tornado is imminent, emergency management agencies move into high gear to be ready to rescue people. Emergency teams rely on statistics to tell them when the danger may occur. Conclusion Before learning and understanding statistics, numbers were just numbers in the media. I used to view them as hard to understand and never even tried. The thought that one would understand the jargon in statistics was almost overwhelming. But now I can make inferences about the population and changes represented in its statistics, understand crime reports and what they mean, understand the meaning of increase in interest rates, understand changes in inflation among other uses of statistics. Now i can make better choices about what to eat to be healthy and increase chances of a longer life; avoid foods high in calories and eat more vegetables. I can clearly say that I am a better investor today than I was before this study! Works Cited Dodge, Yeus. The Oxford Dictionary of Statistical Terms: Facts defined: London: Oxford University Press, 1998. Print. Freedman, David. Statistical Models: Theory and Practice. Cambridge: Cambridge University Press, 2009. Print. Ferranti, L and Corti, S. New Clustering Products: ECMWF Newsletter Spring Vander, Vaat. Asymptotic Statistics: The New Approach. Cambridge: Cambridge University Press, 1998. 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