Fig. Economics Statistics play a major role in this field and they feed into each since both are largely number- and fact-based. The types of errors are illustrated in Fig. The relationship between supply and demand is studied by statistical methods; imports and exports, inflation rates, and per capita income are problems which require a good knowledge of statistics… The relationship between these concepts can be expressed in the following equation: Figure. Probably if you are fairly confident about your knowledge in Statistics and Statistical Tools , that too will help a lot in studying as well as applying Economics. Whether it is Micro economics, Production Systems, Economics growth, Macro economics, it is hard to explain as well as understand the theory without the use of mathematics. Introduction to Economics: Basic Concepts and Principles As a novice, economics seems to be a dry social science that is laced with diagrams and statistics; a complex branch that deals with rational choices by an individual as well as nations — a branch of study which does not befit isolated study but delving into the depths of other subject areas (such as psychology and world politics). Probability Distributions The probability distribution for a random variable X gives the possible values for X, and the probabilities associated with each possible value (i.e., the likelihood that the values will occur) Regression is a statistical measurement that attempts to determine the strength of the relationship between one dependent variable (usually denoted by Y) … It establishes relationship between variables like price and quantity demanded or quantity supplied, global warming and agricultural output, money supply and price level and so on. Accuracy and precision in laboratory measurements. Statistics allows economists to make forecasts and determine the probability of an occurrence. Therefore, many students take at least a year of calculus, statistics and forecasting courses called econometrics in pursuit of a bachelor’s degree in economics. In economics research, statistical methods are used to collect and analyze the data and test hypotheses. 6-1. Countries with weak health and education conditions find it harder to achieve sustained growth. It is an integration of economics, mathematical economics and statistics with an objective to provide numerical values to the parameters of economic relationships. The two basic types of regression analysis are: Simple regression analysis: Used to estimate the relationship between a dependent variable and a single independent variable; for example, the relationship between crop yields and rainfall. Thus, economics as a discipline is linked up with statistics on many occasions. An Introduction to Basic Statistics and Probability – p. 10/40. Econometrics deals with the measurement of economic relationships. Indeed, economic evidence confirms that a 10% improvement in life expectancy at birth is associated with a rise in economic growth of some 0.3-0.4 percentage points a year. Three primary uses that show the importance of statistics in economics include analyzing data, collecting information and testing hypotheses. The effects of health on development are clear. 6-1.