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importance of statistics

If you’re taking a statistics class right now, you might be wondering just when exactly you’re going to use this. Most people who aren’t business majors or math majors often wonder what they need statistics for as it seems to be something only majors similar to those would need. However, statistics plays an important role in a great number of different fields, some of which you might not have expected. Here’s a list of fields that use statistics and why it’s important to each field.

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The Role of Statistics in Business

If you’re a business major, you’re familiar with the role statistics plays in your field. However, if you haven’t gotten to that point yet, here’s some information on statistics in the business field. Statistics involves making decisions, and in the business world, you often have to make a quick decision then and there.

Using statistics, you can plan the production according to what the customer likes and wants, and you can check the quality of the products far more efficiently with statistical methods. In fact, many business activities can be completed with statistics including deciding a new location, marketing the product, and estimating what the profit will be on a new product.

Examples of Statistics in Business

If you still don’t see the connection to statistics and business, check out this short list of examples:

These are examples of marketing phrases that businesses will use to make their product sell. These involve the use of statistics.

The Role of Statistics in Mathematics

It should seem obvious that statistics plays a key role in mathematics considering it’s a branch of applied mathematics. However, statistics is in more than just its own separate branch of math. You can find statistical techniques in integration, differentiation, and algebra, and you can find those in statistics as well.

Much of math is based on probability and theories, and statistical methods help make those mathematical theories that much more accurate. Using averages, dispersions, and estimation allows you to come up with conclusions that are closer to the real answer than just taking a wild guess. 

Examples of Statistics in Mathematics

Here are a few examples of statistics used in math:

As you can see, some of these are basic mathematics skills you might remember from elementary school. These are used in statistics.

The Role of Statistics in Economics

Much of economics depends on statistics. Economists use statistics to collect information, analyze data, and test hypotheses. Relationships between supply and demand and imports and exports are found using statistical information. The same can be said for figuring out the inflation rate, the per capita income, and even the national income account. A good example of statistics and economics in the real world would be the Census Bureau and the information they collect and use to decide many other political items.

The Role of Statistics in Accounting

Accounting involves mostly basic arithmetic, but when it comes to creating accounting reports, statistics plays a key role. When balancing and checking accounts, exactness is very important, but when using those reports to decide how well the company is doing and the trends within the business. You can also use statistics in accounting to create projections for the next fiscal year. 

The Role of Statistics in Banking

Banks use statistics for a great number of the services they offer. A bank works on the idea that someone will deposit their money and not withdraw all of it later on. They earn their profit by lending money to others with interest, and the money they use is the money other people deposit.

Bankers use statistical approaches to estimate the number of people who will be making deposits compared to the number of people requesting loans. A great example of statistics used in banking is the FDIC’s own quarterly publication called Statistics on Banking.

The Role of Statistics in Management and Administration

A nation’s government runs on statistics. They use statistical data to make their decisions regarding any number of things. Most federal and provincial budgets are designed upon statistical data because it’s the most accurate data available when estimating expected expenditures and revenue.

Another great example of statistics in the government is figuring out whether or not to raise the minimum wage due to a rise in the cost of living. Statistical data gives the government the best idea regarding whether or not the cost of living will continue to rise. 

The Role of Statistics in Astronomy

It is impossible to take out a ruler and measure the distance of the Earth from the sun. Unless, of course, you somehow manage to invent a suit that can survive the temperatures of the sun and design a ruler long enough to measure such a distance. However, it would likely take you a very long time to measure such a distance anyway.

Instead, astronomers use estimates and mathematical theories to devise their best guess to just how far items in the universe are away from each other. This is why when you read a news report that a star will likely be going supernova “any day now,” you have to understand that “any day now” could mean tomorrow, a year from now, or even ten thousand years from now.

The Role of Statistics in the Natural and Social Sciences

Biology, physics, chemistry, meteorology, sociology, communication, and even information technology all use statistics. For many of these categories, the use of statistics in that field involves collecting data, analyzing it, coming up with a hypothesis, and testing that hypothesis.

In biology, the use of statistics within that field is known as biostatistics, biometry, or biometrics. Biostatistics often involves the design of experiments in medicine, online pharmacy, agriculture, and fishery. It also involves collecting, summarizing, and analyzing the data received from those experiments as well as the decided results. Medical biostatistics is a separate branch that deals mainly with medicine and health.

Physics uses probability theory and statistics dealing mainly with the estimation of large populations. In fact, the phenomenological results of thermodynamics were developed using the mechanics of statistics.

There are further examples of statistics in these sciences fields including analytical chemistry, which involves the presentation of problems in data analysis and demonstrating steps to solve them. Meteorology uses statistics in stochastic-dynamic prediction, weather forecasting, probability forecasting, and a number of other fields.

Sociology uses statistics to describe, explain, and predict from data received. Like many of the sciences, communication uses statistical methods to communicate data received. Information technology also uses statistics to predict particular outcomes.

Page Last Updated: July 2021

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