Class XI

STATISTICAL ECONOMICS

Introduction and Scope of

Statistics
PRASHANT KIRAD
 PRASHANT KIRAD

Ch:1 Introduction and Scope of Statistics

Why Statistics is Included in Economics?

Statistics is an essential part of economics because it provides the
tools and techniques to quantify and analyze economic activities
and behaviors. The inclusion of statistics in economics can be
understood through various key aspects:

What is Statistics?
Statistics is the science of collecting, analyzing, and interpreting
quantitative data. It involves the quantification of facts and
findings, providing numerical information to support decision-
making. 2 th
& 1
Definition of Economics:
1 t h
By Alfred Marshall: Economics d 1
is "the study of mankind in the
i ra
K
ordinary business of life."
t
h a n
By Lionel Robbins: Economics is "a science that studies human

ra s
behavior as a relationship between ends and scarce means which
Palternative
have uses."
Exam mai aayega!

Statistics as Numerical Data: (EMA)

Definition: In its plural sense, statistics refers to information

presented in numerical form, such as poverty statistics,
employment statistics, population statistics, etc.
Examples: Examples of statistics include data sets like
unemployment rates, average income levels, and population
growth rates.
 PRASHANT KIRAD

Numerical Information vs. Statistics:

Not all numerical information qualifies as statistics. For instance,
individual numerical facts without aggregation or analysis do not
constitute statistics.

Distinguishing Data from Statistics:

Example of Non-Statistics: "Ayesha has $500 left in her wallet
at the end of the month." This is simply a piece of numerical
information and not a statistic since it does not represent an
aggregate or an average.
Example of Statistics: "The average amount left in an
individual's wallet at the end of the month is $500." This is a
2 th
statistic as it provides an aggregate measure that can be
analyzed. & 1
1 th
Definitions of Statistics in Plural
d 1 Sense:
By Bowley: ira
t K numerical statements of facts.
h a n
Definition: Statistics are
Context: s
These facts pertain to any department of inquiry.
Pra The facts are placed in relation to each other to
Relationship:
provide meaningful insights.
By Kendall and Yule:
Definition: Statistics are quantitative data.
Characteristics: These data are significantly influenced by
multiple causes.
Complexity: The data reflect the complexity of various factors
impacting the subject of inquiry.

JOSH METER?
 PRASHANT KIRAD

Features of Statistics in Plural Sense:

1. Aggregate of Facts:
Description: Single or random numbers do not constitute
statistics, as no meaningful conclusion can be drawn from them.
Significance: Statistics are the aggregates of facts, providing
a basis for drawing conclusions and making analyses.
2. Numerically Expressed:
Requirement: Statistics must be expressed in terms of
numbers.
Exclusion: Qualitative descriptions such as small, big, poor, or
rich do not qualify as statistics.
3. Multiplicity of Causes:
2th
1
Influence: Statistics are affected by multiple factors.
&
1th
Complexity: The presence of multiple influencing factors
1
ensures that the data remain meaningful even if one factor is
d
removed.
ira
t K
4. Reasonably Accurate:
an
Precision: Statistics should be reasonably accurate to be
h
s
Pra
reliable.
Trustworthiness: Accuracy is essential for making informed
decisions based on statistical data.
5. Mutually Related and Comparable:
Interrelation: Statistical data must be related and comparable.
Utility: This relationship and comparability enhance the utility
of the data for analysis and interpretation.
6. Pre-determined Objective:
Purpose: Statistics are collected with a specific,
predetermined purpose.
Objective: Any information collected without an objective is
merely numerical data and not considered statistics.
 PRASHANT KIRAD

Statistics as a Singular Noun:Science of Statistical Methods

Definition: Statistics, in its singular sense, refers to the science

of statistical methods. It encompasses the techniques and
methodologies used for handling quantitative data.

1. Collection:
Description: Systematic gathering of quantitative data through
various methods such as surveys, experiments, and
observations.
2. Organization:
Description: Structuring and arranging data into categories for
better understanding and analysis.
3. Presentation:
2th
1
Description: Displaying data in a clear and understandable
&
format.
1th
1
Methods: Using graphs, diagrams, and tables to visually
d
ir
represent data.a
4. Analysis: t K
han
Description: Examining data to identify patterns, relationships,
s
Pra
and trends.
Techniques: Calculating averages, percentages, and performing
statistical tests.
5. Interpretation:
Description: Drawing conclusions and making inferences from
the analyzed data.
Objective: Providing insights and supporting decision-making
processes.
 PRASHANT KIRAD

Statistical tools:
Standard techniques or methods used in each stage of statistical
study.Example:Graphs,Tables,Pie charts are some of the statistical
tools used for presentation of data.

Scope of Statistics:
1. Nature of Statistics:
Science: Involves systematic methods and techniques for
collecting, analyzing, and interpreting data.
Art: Requires skill and judgment to apply statistical methods
effectively to real-world problems.

th
2. Subject Matter of Statistics:
2
manner. & 1
Numerical Data: Studies data in a scientific and systematic

1th
Application: Helps relate data to real-life problems for analysis
d 1
and decision-making.
ira
K
Types of Statistical Methods:
t
an
a. Descriptive Statistics:
h
s
Definition: Methods used for the collection, presentation, and
Pra
analysis of data.
Scope: Includes data from each and every element of the given
population.
Purpose: Summarizes and describes the features of a dataset,
providing a clear view of the data.
b. Inferential Statistics:
Definition: Methods used to draw conclusions about a population
based on a sample.
Scope: Involves making inferences or predictions about the
entire population from a representative sample.
Purpose: Helps generalize findings from a sample to the larger
population.
 PRASHANT KIRAD

Note on Universe or Population in Stats:

Definition: Refers to the aggregate of all items or units related
to any subject of study.
Purpose: Understanding the complete set of data points for
comprehensive analysis.

Limitations of Statistics: (EMA)

1. Study of Aggregate Data:

Limitation: Statistics typically focuses on aggregates or groups
rather than individual cases.
Implication: Insights are drawn from overall patterns and may
th
overlook specific details or anomalies in individual data points.
2
2. Study of Numerical Data:
& 1
1th
Limitation: Statistics requires data to be in numerical form for
analysis.
d 1
ira
Implication: Qualitative data that cannot be quantified is not
K
addressed by statistical methods.
t
an
3. No Study of Heterogeneous Data:
h
s
Pra
Limitation: Statistics may struggle with data that is highly
heterogeneous or varied.
Implication: Variability in data types or sources can complicate
analysis and interpretation.
4. Results are True Only as Averages:
Limitation: Statistical results often represent averages or
general trends.
Implication: Such results may not fully capture extremes or
specific cases within the data.
5. Results Must Be Contextualized:
Limitation: Statistical results cannot be interpreted in isolation
without reference to context.
Implication: Proper understanding requires consideration of the
context in which the data was collected and analyzed.
 PRASHANT KIRAD

6. Requires Expertise:
Limitation: Effective use of statistical methods often requires
specialized knowledge and skills.
Implication: Misapplication of statistical techniques by non-
experts can lead to incorrect conclusions.
7. Potential for Misuse:
Limitation: Statistics can be misused or manipulated to support
biased interpretations.
Implication: Data can be presented in ways that mislead or
distort the true findings, as statistical results are not always
clear-cut.
(EMA)
Importance and Functions of Statistics:
1. Quantitative Expression of Economic Problems:1 2 t h
Provides numerical data on issues like
h & poverty and
unemployment for clear analysis. 1 t
d 1 Comparison:
ir a
2. Inter-Sectoral and Inter-Temporal

t K
Description: Allows for comparisons between different sectors
a n
and across different
h years.

r a
Temporal sComparison: Compares data from different years.
P Comparison: Compares data from various sectors
Sectoral
within the same period.
3. Establishing Cause and Effect Relationships:
Identifies how changes in one factor affect another.
4. Policy Formation:
Aids in creating data-driven policies for better decision-making.
5. Forecasting:
Predicts future trends based on past data.
6. Establishing Economic Models:
Develops models like demand functions and consumption
functions to understand economic behavior.
 PRASHANT KIRAD

Top 5 Questions
Q1.Define statistics.
Ans: Statistics can be defined as the collection, presentation,
classification, analysis, and interpretation of quantitative data.
Q2.What are the stages of statistical study?
Ans: The stages of a statistical study are:
Collection of data
Organisation of data
Presentation of data
Analysis of data
Interpretation of data
Q3.Define statistics as a plural noun.
2 th
Ans: In the plural sense, statistics is defined as&
1
the information
in terms of numerical data or numbers such1 th
as employment
d 1expenditure, population
statistics, statistics concerning public
statistics, etc. ira
t K
Q4.What are the two
a n components of the subject matter in
statistics? sh
P r a
Ans: The two components of the subject matter in statistics are:
Descriptive statistics
Inferential statistics
Q5.What is descriptive statistics?
Ans: Descriptive statistics refers to those methods which are
used for the collection, presentation as well as analysis of data.
These methods relate to such estimations as a measurement of
central tendencies, measurement of dispersion, measurement of
correlation, etc.
Class XI

STATISTICAL ECONOMICS

Collection of Data
PRASHANT KIRAD
 PRASHANT KIRAD

Ch:2 Collection of Data

Exam mai aayega!
Sources of Data Collection: (EMA)

1. Primary Source:
Definition: Data collected directly from the original source.
Description: First-hand data gathered specifically for the current
investigation.
Example: Surveys, interviews, and experiments conducted by the
researcher for their own research purpose.
2. Secondary Source:
Definition: Data that already exists and was collected for a
different purpose.
Description: Second-hand data gathered by others and used for a
new analysis.
2th
1
Example: Reports, academic papers, and historical records originally
&
th
compiled for other studies.
1
3. Primary Data:
d 1
ra
Description: Data collected directly by the researcher through
i
K
original methods.
t
an
Purpose: Gathered specifically for the researcher’s own research
h
s
Pra
objectives.
Characteristics: Fresh and tailored to the specific needs of the
current study.
4. Secondary Data:
Description: Data that was collected previously for a different
purpose.
Purpose: Used by the current investigator for new analysis or
research.
Characteristics: Pre-existing data repurposed for the current study.
5. Distinction:
Primary Data: Collected for the first time by the researcher.
Secondary Data: Collected previously by others and used for a new
purpose.
 PRASHANT KIRAD

Modes of Data Collection (Primary Data) (EMA)

A) Personal Interviews:
1. Description:
Definition: Direct personal investigation where the researcher
interacts directly with individuals to gather information.
Method: The researcher establishes a direct relationship with the
respondents to obtain data.
2. Suitability:
Field Size: Effective when the field or sample size is not very large.
Originality: Suitable when a greater degree of originality and
accuracy is required.
Sensitivity: Ideal for collecting sensitive or confidential information
that must be kept secret.
3. Merits:
2 th
& 1
Reliable Information: Provides reliable and firsthand data.
th
Accurate Data: Ensures accuracy through direct interaction.
1
1
Original Data: Collects data that is original and specific to the
d
study.
ira
t K
Related Information: Allows the researcher to obtain additional
a n
related information.
h
r
4. Demerits:as
P
Costly: Can be expensive due to the resources required for
conducting interviews.
Time-Consuming: Requires a significant amount of time to conduct
and complete interviews.
Limited Coverage: Coverage may be limited to a smaller sample size,
impacting generalizability.
 PRASHANT KIRAD

B)Indirect Oral Investigation:

1. Description:
Definition: Information is collected indirectly by interviewing
individuals who are expected to possess relevant knowledge, rather
than the primary source themselves (e.g., witnesses or
knowledgeable third parties).
2. Suitability:
Large Area: Useful when the area of investigation is large and
direct contact with every respondent is impractical.
Inaccessible Respondents: Suitable when the concerned person is
not accessible or capable of providing the information.
3. Merits:
Cost-Efficient: Generally less expensive compared to direct
methods like personal interviews.
2 th
1
Ease of Use: Simplifies the data collection process.
&
1 t h
Wide Coverage: Enables coverage of a broader area or larger
population.
d 1
ir a
Expert Opinion: Provides access to expert or knowledgeable opinions
from third parties.
t K
4. Demerits:
h a n
r a s
Less Accurate: Data may be less accurate as it relies on the
P
recollections or interpretations of others.
Possibility of Bias: Responses may be subject to personal bias or
subjective views of the informants.
Doubtful Conclusions: Information may lead to questionable
conclusions due to potential inaccuracies or misinterpretations.
 PRASHANT KIRAD

C)Information from Local Sources or Correspondents

1. Description:
Definition: The researcher appoints local individuals or
correspondents (often referred to as "Khabri") who gather
information from their respective areas and report it back to
the researcher.
2. Suitability:
Large Area: Ideal for investigations covering extensive
geographic areas where direct data collection is challenging.
Continuous Information: Suitable when ongoing or continuous
information is required.
Acceptable Accuracy: Used when a reasonable level of accuracy
2th
is acceptable but not necessarily precise.
3.Merits: & 1
1th
Cost Saving: Reduces costs by utilizing local individuals for data
collection. d 1
ira
K
Wide Coverage: Enables extensive geographical coverage
t
han
through local correspondents.
s
Continuity: Facilitates continuous information collection and
Pra
updates.
Special Purpose: Effective for gathering specific information
tailored to particular needs or contexts.
4.Demerits:
Personal Bias: Data may be influenced by the personal biases or
perspectives of local correspondents.
Lack of Originality: Information might lack originality as it is
reported by intermediaries rather than directly from the primary
source.
Less Accurate: Potential for decreased accuracy due to reliance on
third-party reports and interpretations.
 PRASHANT KIRAD

D)Information Through Questionnaires & Schedules

1. Mailing (Questionnaire) Surveys:

Description: A questionnaire is sent to respondents by mail or
post, along with a letter explaining the purpose of the inquiry.
Respondents complete the questionnaire and return it to the
investigator.
Merits:
Cost Saving: Reduces costs by eliminating the need for face-to-
face data collection.
Time Saving: Allows for simultaneous distribution to a large
number of respondents.
Wide Coverage: Reaches a broad geographical area and diverse
respondent base.
2th
1
Reliable Data: Can provide reliable data if the responses are
&
th
accurately completed and returned.
1
Demerits:
d 1
ira
Biased: Responses may be influenced by the respondent’s
t K
personal biases or misunderstandings.
Less han
Accurate: Potential for inaccuracies due to
s
Pra
misinterpretation or incomplete responses.
Limited Use: May not be suitable for collecting detailed or
complex information.
Lack of Flexibility: Limited ability to probe or clarify responses
due to the absence of direct interaction.
2.Enumerator Method:
Description:
An enumerator prepares and administers the questionnaire
directly to respondents, filling out the schedules based on their
responses.
 PRASHANT KIRAD

Merits:
Personal Contact: Direct interaction with respondents can
improve response quality and clarity.
Accuracy: Increases accuracy by allowing the enumerator to
clarify questions and ensure correct responses.
Wide Coverage: Can cover a large area with multiple
enumerators in different regions.
Related Information: Enables collection of additional relevant
details through direct engagement.
Demerits:
Time Consuming: Requires considerable time for enumerators
to visit respondents and complete the data collection.

th
Expensive: Involves higher costs for training, compensating,
2
and managing enumerators.
& 1
Availability of Enumerators: Challenges in recruiting and
1 th
maintaining a sufficient number of qualified enumerators.
d 1
Characteristics of a K iraQuestionnaire:
Good (EMA)

a n t
a h
1.Limited Questions:
son essential questions to maintain respondent
r
Focuses
P
engagement and relevance.
2.Instructions to Fill:
Provides clear, concise instructions for completing the
questionnaire to avoid confusion.
3.Proper Order of Questions:
Arranges questions logically for a smooth and coherent flow.
4.No Undesirable Questions:
Avoids questions that are irrelevant or might discomfort
respondents.
 PRASHANT KIRAD

5.Cross Verification:
Incorporates methods to verify the accuracy and consistency
of responses.
6.Simplicity:
Uses straightforward language and clear format to ensure
easy understanding and response.

Telephonic Interviews:
Definition: Collecting desired information via telephone call.
Merits:
Inexpensive: Generally lower cost compared to in-person
interviews.
th
Reliability: Can provide reliable data if conducted effectively.
2
1
Cost Saving: Reduces expenses related to travel and logistics.
&
Demerits:
1 th
1
Personal Bias: Responses may be affected by the interviewer’s
d
ra
or respondent’s personal biases.
i
t K
h a n
Note on Pilot Survey:
a s
Description:
r A preliminary survey conducted on a very small sample
Pthe population to test and refine the survey process and
from
questions before a full-scale study.

Collection of Secondary Data:

1.Published Sources:
a. Government Publications:
Examples: RBI Bulletin, Agricultural Statistics of India, Annual
Survey of Industries.
b. Semi-Government Publications:
Examples: Publications from municipalities and metropolitan
councils.
c. Publications of Trade Associations:
Examples: Reports from associations like the Sugar Mill
Association, Textile Association.
 PRASHANT KIRAD

d. Reports of Committees and Commissions:

Examples: Reports from the Finance Commission, Planning
Commission (Niti Aayog).
e. Publications of Research Institutions:
Examples: Publications from the Indian Statistical Institute,
National Council of Applied Economic Research.
f. International Publications:
Examples: Reports and data from organizations such as the UNO,
IMF, World Bank.
g. Journals and Papers:
Examples: Academic and professional journals containing research
papers and studies.
h. Publications of Research Scholars:
Examples: Reports and papers from individual researchers and
2 th
scholars.
& 1
Unpublished Sources:
Definition: 1 t h
d 1
Description: Data collected by government organizations and other
ira
K
entities primarily for internal use or record-keeping, not yet
t
h a n
formally published.
s
Caution for Users of Secondary Data:
raof Data: Verify the accuracy and trustworthiness of the data.
P
Reliability
Suitability of Data: Ensure the data is relevant to the current research
or analysis needs.
Adequacy of Data: Check if the data is sufficient to meet the
requirements of the study or analysis.

Important Sources of Secondary Data:

1. Census of India:
Description: Comprehensive data on the Indian population, published by
the Registrar General and Census Commissioner of India.
2. NSSO (National Sample Survey Office):
Description: A government organization under the Ministry of Statistics
& Programme Implementation, responsible for conducting large-scale
surveys and collecting statistical data.
 PRASHANT KIRAD

Top 5 Questions
Q1.Explain various modes of collecting the data?
Ans: We have three major modes of collecting the data. Each has its advantages
and disadvantages. They are as follows:
Personal interviews are the interviews conducted face to face. It has a high
response and can provide open-ended questions. The reliability is high
compared to other methods.
Mailing questionnaires is sending a set of questions through emails. It
doesn't disturb or consume the time of people. It also gives reliable answers
without any inferiority or ambiguity. But we can't expect more people to
answer.
Telephone interviews are the interviews done by telephone. It is very cheap
and provides more reliability. But consumes a lot of time and many people may
refuse unknown calls.
Q2.Define primary data.
2 th
& 1
Ans: Primary data is the collection of data collected by the investigator
for his own purpose for the first time. These are collected from the source
of origin.
1 t h
Q3.Mention three demerits of indirect d 1oral investigation.
ir abe less accurate as it relies on the
Ans: Less Accurate: Data may
t K of others.
a
Possibility ofhBias:
nResponses may be subject to personal bias or
recollections or interpretations

r a
subjective
sviews of the informants.
P
Doubtful Conclusions: Information may lead to questionable conclusions
due to potential inaccuracies or misinterpretations.
Q4.Define sample.
Ans: Sample is a collection of an item from the population that represents
the characteristics of the population.
Q5.When are the qualities of a good questionnaire?
Ans: A good questionnaire should have the following qualities:
Less number of questions
Should be clear
Proper order of question
Non-controversial
Questions related to the topic
Request for return
Class XI

STATISTICAL ECONOMICS

Census and Sampling

Methods
PRASHANT KIRAD
 PRASHANT KIRAD

Ch:3 Census and Sampling Methods

Population Framework
"It refers to the complete set of items or elements that will be
examined in the investigation."
Exam mai aayega!

Census Method: (EMA)

Definition: The data is collected from every item of the

universe relating to the reference of investigation.
Suitability:
When population size is small.
High degree of accuracy is required.
When related information is required.
Merits: 2th
1. Comprehensive Data Collection & 1
2. Accurate Population Count 1 t h
d 1
3. Informed Policy Making and Planning
ir a
K
4. Fair Resource Allocation
t
a n
5. Supports Electoral Districting and Representation
Demerits. ash
P r
1. Lack of Focus
2. Poor Time Management
3. Insufficient Practice
4. Incomplete Understanding
5. Lack of Consistency
 PRASHANT KIRAD

Sample Method:
The data is collected from a selected sample rather than from
every element of the entire population. It is assumed that this
sample reflects the characteristics of the whole population, and
conclusions are made based on this assumption.
Suitability:
When population size is large.
Only reasonable accuracy is required.
Homogeneous items.
Merits:
1. Cost-Effectiveness
2. Time Efficiency
3. Manageability 2th
4. Higher Accuracy & 1
5. Versatility 1th
Demerits: d 1
ir a
1. Biased.
t K
h a n
2.Potential for wrong conclusions.
s
3.Only for specialists.
Pra in selecting a sample.
4.Difficulty
(EMA)
Methods of Sampling:
1.Random Sampling:
Every element has an equal probability of being chosen as part of
the sample, with the investigator having no influence over the
selection process.
Merits:
Free from personal bias.
Simple method.
Every item has an equal chance of selection.

JOSH METER?
 PRASHANT KIRAD

Demerits:
No weightage to important items.
No guarantee of true results.
2.Non-Random Sampling:
The investigator personally selects the sample, choosing what they believe to
be the most representative based on their judgment.
Merits:
1.Simple technique.
2.Preference to important items.
3.Scientific method.
Demerits: 2 th
1.Personal bias. & 1
2.Doubtful results. 1 th
d 1
3.Systematic Sampling:
ira
t K
The population units are organized in a systematic order (such
a n
as by number, alphabet,
h or location), and every nth item is
a sof the sample.
chosen asrpart
P
Merits:
1. Simple.
2.No personal bias

4.Quota Sampling:
Quota Sampling is a non-probability sampling technique where
researchers divide the population into distinct groups, or quotas,
based on specific characteristics (like age, gender, or income level)
and select samples within each group to meet a pre-set quota. The
aim is to ensure that the sample reflects the characteristics of
the population without using random selection.
 PRASHANT KIRAD

5.Convenience Sampling:
Convenience Sampling is a non-probability method where
researchers select participants based on ease of access or
availability. It's quick and easy but may lack representativeness.
6.Cluster Sampling:
Cluster Sampling is a probability sampling method where the population
is divided into natural groups, or "clusters" (like neighborhoods or
schools). Researchers randomly select entire clusters, then include all
or a random subset of individuals within each chosen cluster.

7.Snowball Sampling:
Snowball Sampling is a non-probability technique where existing
participants recruit future participants, creating a “snowball” effect.
It’s often used for hard-to-reach populations.
2 th
& 1
1 th
Statistical Errors: d 1 (EMA)

ira
A) Sampling Error:
t K
a n
Definition: Errors
h related to the nature and size of the sample T
a
selected.
r s
Due to a very small sample size, the estimated value
mayPdiffer from the actual value of the parameter.
B) Non-Sampling Error:
Definition: Errors related to the collection of data.

Error in Measurement: Inaccurate measurements taken.

Error of Non-Response: Lack of responses from selected
samples.
Error of Misinterpretation: Incorrect interpretation of data.
Error in Data Acquisition: Responses recorded incorrectly.
Error of Sampling Bias: Systematic bias in the sampling
process.
 PRASHANT KIRAD

Top 5 Questions
Q1.Which of the following errors is more serious and why ? (a)
Sampling error or (b) Non-sampling error.
Ans:Non-sampling error is more serious than a sampling error.
Because a sampling error can be minimised by opting for a larger
sample size. No such possibility exists in case of non-sampling
errors.
Q2.Explain the procedure of selecting a random sample of 3
students out of 10 in your class, by using random number tables.
Ans:Here largest number is 10 and we have other 9 numbers i.e.
one digit number. So we will consult one digit random number and
we will skip the random number greater than 10 because there is
th
no student number greater than 10. Thus the 3 selected students
2
out of 10 are with serial number would be 5,9,2. & 1
1
Q3.Discuss how you would use the the lottery t hmethod to select 3
student out of 10 in your class ?ad
1
K
Ans:A representative (random)
ir sample of 3 students can be taken
out of 10 through a n t method. The names of all the 10 students
lottery
a
of the class s h
are written on 10 separate pieces of paper of equal
r
Pall the slips are folded in a similar manner. These slips are
size and
then mixed well and 3 slips with these names are selected one by
one, so that all the students have equal chance of being selected in
the sample.
Q4.Which of the following is a preferred method of statistical
studies, and why ? (a) Census (b) Sample
Ans:Sample method of statistical investigation is generally
preferred to the census method because the former is less
expansive in terms of the time, money and effots involved.
However, for the successful application of the sample method, it is
very essential that the sample items represents the
characterstics of population as a whole.
 PRASHANT KIRAD

Q5.Explain Non-Sampling Errors and its types.

Ans:Non-Sampling error refers to errors that occur during data
collection and cause data to differ from true values.
Types of non-sampling errors are:

Error in Measurement: Inaccurate measurements taken.

Error of Non-Response: Lack of responses from selected
samples.
Error of Misinterpretation: Incorrect interpretation of data.
Error in Data Acquisition: Responses recorded incorrectly.
Error of Sampling Bias: Systematic bias in the sampling
process.

2th
& 1
1th
d 1
ira
t K
han
ras
P
Class XI

MICRO ECONOMICS

Theory of Demand

PRASHANT KIRAD
 PRASHANT KIRAD

Ch:3 THEORY OF DEMAND

Demand:
1.Desire for a commodity: The willingness to consume or acquire a
product or service.
2.Ability to buy it: The consumer must have the financial means or
purchasing power to acquire the commodity.
3.Willingness to pay for it: Consumer's readiness to exchange
money or other goods for the desired commodity.
4.At the given price of a commodity: The specific price at which
the consumer is willing to buy the commodity.
5.In the given time period: Demand is influenced by factors
relevant within a specific timeframe.
2 th
Determinants of Demand and Their Relationship:
& 1
Price of the commodity (Px): 1 t h
Relationship with Demand: Asdthe 1 price of a commodity (Px)
increases, ceteris paribusir a(assuming all other factors remain
t Kdemanded typically decreases. This is
known as s h
the
n
constant), the quantity
a
law of demand, where consumers tend to buy less
ra as its price rises, and vice versa.
Pgood
of a
Income of the consumer (M):
Relationship with Demand: Higher income (M) generally leads to
an increase in demand for normal goods. These are goods where
demand rises as consumer income increases. Conversely, for
inferior goods, demand may decrease as income rises.
Tastes and preferences (T):
Relationship with Demand: Consumer tastes and preferences (T)
play a significant role in determining demand. Changes in
preferences, influenced by factors such as fashion trends,
health considerations, or cultural shifts, can lead to shifts in
demand for certain goods or services.
 PRASHANT KIRAD

Number of consumers or population (Pl):

Relationship with Demand: An increase in the number of
consumers (Pl) can lead to an increase in overall demand for a
product or service. This is because a larger potential consumer
base means more individuals are potentially interested in
purchasing the good or service.
Time (t):
Relationship with Demand: Time considerations include seasonal
demand variations, long-term trends, and lifecycle changes.
Seasonal goods like winter coats or holiday decorations see
fluctuations in demand depending on the time of year. Long-
term trends can affect demand as consumer preferences and
2th
technology evolve over time.
&
Price of related goods (Pr):
1
1th
Relationship with Demand: Related goods include substitutes
d 1
and complements. Changes in the prices of substitutes (goods
ira
that can be used in place of each other) and complements
t K
han
(goods consumed together) affect demand. For substitutes, an
s
increase in the price of one may lead consumers to switch to the
Pra
other. For complements, changes in the price of one good can
influence the demand for the other. For example, if the price
of printers drops, there may be an increase in the demand for
printer ink cartridges.
Exam mai aayega!
Law of Demand: (EMA)

The Law of Demand states that, with all other factors remaining
constant, there is an inverse relationship between the price of a
good and the quantity demanded. This means as the price of a
commodity increases, the quantity demanded decreases, and
conversely, as the price decreases, the quantity demanded
increases.
 PRASHANT KIRAD

Assumptions of the Law of Demand:

1.Constant Money Income:
Assumption: The income of consumers remains unchanged.
Importance: If income varies, it could affect purchasing power
and, consequently, demand levels regardless of price changes.
2.Same Taste and Preferences:
Assumption: Consumer tastes, preferences, and habits
regarding the good remain consistent.
Importance: Changes in consumer preferences can significantly
impact demand, making it difficult to isolate the effect of price
changes alone on demand.
3.Unchanged Population:
2th
Assumption: The size of the consumer population does not
fluctuate. & 1
th
Importance: Population changes can alter overall demand levels
1
d 1
due to shifts in the number of potential consumers.
ira
4.Constant Price of Related Goods:
t K
han
Assumption: The prices of substitute goods and complementary
s
goods remain stable.
Pra
Importance: Changes in the prices of related goods can
influence consumer choices and, consequently, demand for the
primary good in question.

Demand schedule:
 PRASHANT KIRAD

Types of Goods Based on Income Effect:

Normal Goods:
Definition: Normal goods exhibit a positive relationship between
consumer income and the quantity demanded.
Relationship with Income: When consumer income increases, the
demand for normal goods also increases. Conversely, if income
decreases, demand for normal goods tends to decrease as well.
Example: As consumers earn more, they may buy more expensive
cars, larger homes, or higher-quality electronics, reflecting an
increase in demand for these goods.
Inferior Goods (Low-Quality Goods):
Definition: Inferior goods demonstrate a negative relationship
between consumer income and the quantity demanded.
2 th
1
Relationship with Income: When consumer income rises, demand for
&
t h
inferior goods decreases.This is because consumers often switch to
1
1
higher-quality alternatives when they can afford them.On the other
d
ir a
hand, when income decreases, demand for inferior goods tends to
t K
rise as consumers opt for more affordable options.
h a n
Example: s
Basic food items, cheaper forms of transportation, or
Praclothing may be considered inferior goods. As income
low-cost
rises, consumers may shift to healthier food options, better
modes of transportation, or higher-quality clothing.
 PRASHANT KIRAD

Types of Goods Based on Price of Related Goods:

Substitute Goods:
Definition: Substitute goods are products that can be used
interchangeably or replace each other to satisfy a consumer's
need.
Relationship with Price of Related Goods: When the price of one
substitute good changes, it affects the demand for the other
substitute in the opposite direction. This relationship is known
as the cross-price elasticity of demand.
Example: Tea and coffee are substitutes. If the price of coffee
rises, consumers may switch to tea as a cheaper alternative,
increasing the demand for tea.

2th
& 1
1th
d 1
ira
t K
han
s
Pra
Complementary Goods:
Definition: Complementary goods are products that are
consumed together to satisfy a specific need or want.
Relationship with Price of Related Goods: Changes in the price
of one complementary good can influence the demand for the
other complementary good. This relationship is also captured by
cross-price elasticity of demand.
Example: Refills and pens are complementary goods. An increase
in the price of refills might reduce the demand for pens
because consumers are less likely to purchase pens without
refills.
 PRASHANT KIRAD

Reasons Why the Demand Curve Slopes Downward:

Law of Demand: (EMA)
Explanation: The fundamental reason for the downward slope of
2th
the demand curve is the law of demand, which states that all
& 1
else being equal, as the price of a good or service decreases,
th
the quantity demanded increases, and vice versa. This inverse
1
1
relationship is a basic principle of economics.
d
Income Effect: ira
t K
Explanation: The income effect is a concept that explains how
h
changes in thea n
ra s
P
Law of Diminishing Marginal Utility:
Explanation: This law asserts that as a consumer consumes more
units of a commodity, the satisfaction or utility derived from
each additional unit diminishes.
Utility Example: For instance, the first slice of pizza consumed
may bring a high level of satisfaction (utility), but as more slices
are consumed successively, the satisfaction from each
additional slice tends to decrease.
Implication: Consumers tend to demand more of a commodity
when its price is lower, reflecting the diminishing additional
satisfaction from each unit as consumption increases.
 PRASHANT KIRAD

Substitution Effect:
Explanation: The substitution effect refers to the change in
quantity demanded of a good in response to a change in the
price of another good, particularly substitute goods.
Negative Relationship: When the price of a substitute good
increases, consumers tend to switch away from that good and
towards the relatively cheaper substitute. This leads to an
inverse relationship between the price of a substitute good and
the quantity demanded.
Example: If the price of coffee rises, consumers may switch to
tea as a substitute, increasing the demand for tea. Similarly, if
the price of tea falls, consumers may switch to coffee,
decreasing the demand for tea.
2 h
t(EMA)
Exceptions to the Law of Demand:
& 1
Giffen Paradox: 1 th
d
Explanation: The Giffen Paradox, 1 proposed by Sir Robert
ir awhere an increase in the price of a
t K
Giffen, suggests a situation
good leads tonan increase in its quantity demanded,
s h
contradicting
a
the law of demand.
Pra In cases where a staple food item (like bread)
Example:
becomes more expensive, lower-income consumers may actually
buy more of it because they can no longer afford other more
expensive foods, such as meat or vegetables.
Ignorance:
Cause: Consumers may lack information about alternative goods
or substitutes, leading them to continue purchasing a good even
as its price rises.
Example: If consumers are unaware of cheaper substitutes for
a product, they may continue to buy it despite its higher price.
 PRASHANT KIRAD

War and Emergency:

Cause: During times of war or emergency, the availability of
goods can be severely restricted, causing prices to rise while
demand remains high due to urgent needs.
Example: In wartime, the demand for essential goods like food,
medicine, and shelter may increase regardless of price
increases.
Necessities of Life:
Cause: Certain goods, such as basic food items or essential
medications, may be considered necessities with limited
substitutes, leading to continued demand even as prices rise.
Example: Vital medicines or specific types of food that are

th
essential for survival may see sustained demand despite price
2
increases.
& 1
Articles of Distinction (Prestigious Goods): h
1 t or have a strong
Cause: Goods that serve as status
d 1 symbols
association with prestige and
i ra social status may see increased
K
demand as their prices rise.
t
Example: Luxury
h a n
goods like designer clothing, high-end automobiles,
a s
or exclusive
r jewellery may experience higher demand as their
P increase due to their perceived status-enhancing qualities.
prices

Habituated Goods:
Definition: Habituated goods are products where the demand is not
necessarily positively related to price changes. Consumers may continue
to demand these goods despite price increases due to habitual
consumption patterns or addiction.
Examples: Tobacco, cigarettes, alcohol, and essential services like
internet connectivity are often considered habituated goods where
demand remains relatively stable even with price fluctuations.
 PRASHANT KIRAD

Change in Demand and Change in Quantity Demanded:

1.Change in Demand: (EMA)
Definition: Change in demand refers to the alteration in the quantity of
a good demanded due to factors other than its own price.
Cause: Changes in factors such as consumer income, preferences,
expectations, population demographics, or prices of related goods
can influence the overall demand for a product.

Types:
Increase in Demand: When demand rises due to favorable changes
in external factors, such as increased consumer income or improved
perceptions about the product.
Decrease in Demand: When demand decreases due to unfavorable
changes, such as economic downturns, shifts in consumer
2 th
preferences, or changes in complementary goods.
& 1
Change in Quantity Demanded: 1 t h
d
Definition: Change in quantity demanded
1refers to movements along the
r a in the price of the good itself,
demand curve in response to ichanges
t K
a
Cause: Whenhthe
n
while other factors remain constant.
s price of a good changes, it directly affects the
rademanded, following the law of demand.
P
quantity
Effect: An increase or decrease in price leads to a corresponding
decrease or increase in the quantity demanded, respectively.

Increase in demand Decrease in demand

 PRASHANT KIRAD

Types:
Increase in Demand: When demand rises due to favorable
changes in external factors, such as increased consumer income
or improved perceptions about the product.
Decrease in Demand: When demand decreases due to
unfavorable changes, such as economic downturns, shifts in
consumer preferences, or changes in complementary goods.
2.Change in Quantity Demanded:
Definition: Change in quantity demanded refers to movements along
the demand curve in response to changes in the price of the good
itself, while other factors remain constant.

th
Cause: When the price of a good changes, it directly affects
2
1
the quantity demanded, following the law of demand.
&
Effect: An increase or decrease in price leads to a
1 th
corresponding decrease or increase in the quantity demanded,
d 1
respectively.
ira
t
Contraction
Kin Quantity Demanded:
h a n
s
Pra
 PRASHANT KIRAD

Expansion in Quantity Demand:

2 th
& 1
Contraction in Quantity Demanded:
1 h
t increases, with other
factors remaining constant.a d 1
1. Occurs when the price of a commodity

2. Leads to a decrease K iinr the quantity demanded of the

commodity. an
t
a
3. Representss h
a movement upward along the same demand curve.
r
P in Quantity Demand:
Extension
1. Occurs when the price of a commodity decreases, with other
factors remaining constant.
2. Leads to an increase in the quantity demanded of the
commodity.
3. Represents a movement downward along the same demand
curve.
 PRASHANT KIRAD

Individual Demand:
Refers to the demand for a specific commodity by an individual
in the market.
Represents the quantity of a commodity that an individual is
willing to buy at various prices.
Reflects the relationship between the price of the commodity
and the quantity demanded by that individual.
Is influenced by factors such as income, preferences, prices of
related goods, and personal tastes.

Individual Demand Schedule:

th
Is a tabular representation showing the quantities of a
2
prices. & 1
commodity an individual is willing to purchase at different

1th
Lists down the various possible prices of the commodity.
d 1
Specifies the corresponding quantities demanded by the
ira
K
individual at each price point.
t
an
Helps illustrate how changes in price affect the quantity
h
s
Pra
demanded by the individual consumer.
 PRASHANT KIRAD

Market Demand:
Refers to the total demand for a specific commodity by all
individuals in the market.
Represents the sum of quantities demanded by all consumers
(A + B) in the market.
Reflects the aggregate relationship between the price of the
commodity and the total quantity demanded by all consumers.
It is influenced by factors such as market size, consumer
preferences, income distribution, and prices of related goods.

Market Demand Schedule:

th
Is a tabular representation showing the total quantities of a
2
1
commodity demanded by all consumers in the market at various
&
prices.
1th
1
Lists down different possible prices of the commodity.
d
ra
Specifies the aggregate quantities demanded (sum of
i
t K
quantities demanded by all individuals) at each price level.
han
Helps illustrate how changes in price affect the total quantity
s
Pra
demanded by all consumers in the market.

JOSH METER?
 PRASHANT KIRAD

Top 5 Questions
Q1.What are the Determinants of Demand?
Ans: The Determinants of Demands are:
Price of the given commodity
Price of related goods
The income of the customer
Tastes and preferences
The expectation of change in the price in future
Q2.Define the law of demand.
Ans: Keeping other factors constant, the law of demand states the
inverse relationship between price and quantity demanded.
Q3.Define Normal goods. 2 th
1
& that witness an
Ans: Normal goods are referred to as those h goods
1 tincome of consumers.
d 1
increased demand corresponding to rise in
The demand for normal goods isadetermined by the state of income
K irincome increases, demand increases
of the consumer. If consumer
a n t
and if income decreases, demand also declines.
s h
Q4.Statera an example that explains how taste and preference
P
of a consumer will affect demand?
Ans: If a person is fond of reading, his preference for reading will
change with age. At a young age, a person prefers to read story
books, at adolescence he may prefer to read novels and in old age
may prefer to read spiritual books.
Q5.Define inferior gods (or Giffen goods).
Ans: In economics, an inferior good is a good whose demand
decreases when consumer income rises or whose demand increases
when consumer income decreases. These goods are also known as
Giffen goods.
Class XI

STATISTICAL ECONOMICS

Organisation of Data

PRASHANT KIRAD
 PRASHANT KIRAD

Ch:4 Organisation of Data

Categorization of Data Exam mai aayega!
(EMA)

Definition: Classification involves organizing raw data in a way that

enables comparison and analysis. To transform raw data into meaningful
information, it is important to categorize it according to various
characteristics.
Example: Classifying data as rich, poor, black, white, etc.
Objectives of Classification:
1. Making Data Short and Simple: Simplifies complex data sets.
2. To Extract Utility: Enhances the usefulness of the data.
3. Making Data Comparable: Facilitates easy comparison.

presentation. 2th
4. Scientific Arrangement: Ensures systematic and organized data

Basis of Classification: & 1

1.Geographical/Spatial: 1 t h
Definition: Based on locationald
1
differences.
Example: Agra, Delhi, K ira
etc.
2.Chronological:
a n t
a s
Definition: h
Based on time.
Pr 1991, 1992, 1993, etc.
Example:
3.Qualitative Classification:
Definition: Based on quality attributes.
Examples:
Intelligence Level
Occupation
Religion
Types:
Simple (Dichotomous): Classification based on two completely
different or opposite characteristics.
Example: Male-Female, Healthy-Unhealthy, etc.
 PRASHANT KIRAD

Manifold: Classification based on more than one characteristic.

Examples:
Skilled-Non-Skilled
Literate-Illiterate
Skilled Literate-Skilled Illiterate
Non-Skilled Literate-Non-Skilled Illiterate

4.Quantitative/Numerical Classification:
Definition: Based on numerical values. A number of classes are
framed keeping in view the lowest and highest values as well as the
range of values in the data.
Types:
Discrete: Values that increase in complete numbers.
Example: Ranks of students (1, 2, 3, 4, etc.). Cannot be fractional
(e.g., 1 ½).
2 th
1
Continuous: Values that increase in fractions and cover a range of
&
values.
1 t h
1
Example: Height of students in a class can be measured in fractions
d
(e.g., 160.5 cm, 162.7 cm).
ira (EMA)

t K
Transforming Raw
h a n Data into Statistical Series:
s
1. IndividualaSeries
Pr Data is presented without class intervals or frequency
Definition:
repetition of numbers.
Arrangement: Can be organized according to serial number,
ascending order, or descending order.
Example:
 PRASHANT KIRAD

2. Frequency Series:
Frequency:
Definition: The number of times an item occurs (repeats).
Example: If 5 marks are obtained by 8 students, then the
frequency of 5 is 8.
Class Frequency:
Definition: The number of times an item repeats itself
corresponding to a range of values (class interval).
Example: 10-15, 15-20, 20-30, and so on.
Tally Bars:
Definition: A method of counting where every fifth item is marked
with a cross bar.
Example:

2th
& 1
1th
d 1
ir a
t K
h a n
s
PraSeries (Frequency Array)
3. Discrete
Definition: Data is grouped into distinct categories with
corresponding frequencies.
Example:
 PRASHANT KIRAD

4. Frequency Distribution (Continuous)

Definition: Data is grouped into continuous class intervals with
corresponding frequencies.
Example:

Types of Frequency Distribution:

2 th
1.Exclusive Series:
& 1
The series with class intervals, in which all thehitems having the range
1 t its upper limit are
from the lower limit to the value just
d 1 below

ir a
included, is known as the Exclusive Series.
Example:
t K
h a n
r a s
P

2.Inclusive Series:
The series with class intervals, in which all the items having the range
from the lower limit up to the upper limit are included, is known as
Inclusive Series. Like exclusive series, the upper limit of one class
interval does not repeat itself as the lower limit of the next class
interval. Therefore, there is a gap (between 0.1 to 1) between the
upper-class limit of one class interval and the lower limit of the next
class interval.
Example:
 PRASHANT KIRAD

(EMA)

Conversion from Inclusive to Exclusive Method:

It is sometimes necessary to convert inclusive class intervals to

exclusive class intervals to address situations where a value might
fall on the boundary of two classes. For example, if a student
obtains 19.5 marks, it must be clear which class interval this value
belongs to. 2 th
Magnitude = upper limit - lower limit & 1
= 10 - 5 = 5 1 t h
Mid-value = upper + lower/2 d 1
ir a
Steps for Conversion:
t K
1. Identify the Class n
s
class and the h a
upper
Intervals: Determine the lower limit of the current
limit of the previous class.
P a
r Consider class intervals 10-19 and 20-29.
Example:
2. Calculate the Difference: Find the difference between the lower limit
of the current class and the upper limit of the previous class.
Example: Lower limit of the current class (20) and upper limit of the
previous class (19).
Calculation: 20−19=120 - 19 = 120−19=1
3. Divide the Difference by 2: This value will be added and subtracted to
adjust the limits.
Example: 12=0.5\frac{1}{2} = 0.521​=0.5
4. Adjust the Class Limits:
For the lower limit of the current class: Subtract the calculated
value.
Example: 20−0.5=19.520 - 0.5 = 19.520−0.5=19.5
For the upper limit of the previous class: Add the calculated value.
Example: 19+0.5=19.519 + 0.5 = 19.519+0.5=19.5
 PRASHANT KIRAD

3.Open End Series:

Sometimes the lower limit of the first class interval and the upper class
limit of a series is not available; instead, Less than or Below is
mentioned in the former case (in place of the lower limit of the first
class interval), and More than or Above is mentioned in the latter case
(in place of the upper limit of the last class interval). These types of
series are known as Open End Series.
Example:

2 th
& 1
4.Cumulative Frequency Series:
A series whose frequencies are continuously1 h
tadded corresponding to
d 1Frequency Series.
ira Series into Cumulative Frequency
the class intervals is known as Cumulative
K
Conversion of a Simple Frequency
t
Series
h a n
s
Pra

Conversion following simple frequency series into a cumulative

frequency series:
 PRASHANT KIRAD

Conversion of Cumulative Frequency into Simple Frequency Series

Example:

Solution:

2 th
& 1
1 t h
d 1
ir a
t
5.Mid-Value Frequency Series:K
a n
The series in which,
h instead of class intervals, their mid-values are given

a s
with the corresponding
r frequencies, is known as Mid-Value Frequency
P
Series.
Conversion into normal:
Steps:
The first step is to determine the mutual difference between the mid-
values.
The next step is to obtain half of the resulting difference.
The last step of conversion is to subtract the resulting figure from the
second step from the mid-value to get the lower limit of the class
interval, and add the resulting figure from the second step to the mid-
value to get the upper limit.
Divide the difference by 2 i.e. (i/2)
Lower limit = l1 m - 1 / 2 (i)
upper limit = l2 = m + 1 / 2 x i
Convert the following Mid-Value Frequency Series into Simple Frequency
Series:
 PRASHANT KIRAD

Solution:

2th
& 1
1th
d 1
ira
t K
han
s
Pra

JOSH METER?
 PRASHANT KIRAD

Top 5 Questions
Q1.What is the advantage of classifying things, explain?
Ans:Classification is a process of data organisation which includes
separating it into different groups. In this process, students will first
need to identify what makes these data differ from one another. They
are then supposed to group this data based on similarity.By segregating
data, we can analyze it more effectively.
Q2.Do you agree that classified data is better than raw data?
Ans:The raw data is usually large and fragmented and it is very
difficult to draw any meaningful conclusion from them. Classification
makes the raw data comprehensible by summarising them into groups.
When facts of similar characteristics are placed in the same class, it
th
enables one to locate them easily, analyse them, make comparison and
2
draw inferences.
& 1
1 h
t used in
Q3.Explain the ‘exclusive’ and ‘inclusive’ methods
classification of data.
d 1
ira the classes are formed in such a
Ans:Exclusive Method In this
t Kof one class becomes the lower class limit
method,

h a n
way that the upper class limit
s
of the next class. Continuity of the data is maintained in this method.
a the upper class limit is excluded but the lower class
rmethod,
P
Under this
limit of a class is included in the interval.According to this method, an
observation that is exactly equal to the upper class limit would not be
included in that class but would be included in the next class. On the
other hand, if it were equal to the lower class limit then it would be
included in that class, e.g., if the class intervals are 0-5, 5-10, 15¬20
and so on, a value of 10 would be included in the 10-15 and not in the
interval 5-10.
The inclusive method does not exclude the upper class limit in a class
interval. It inlcludes the upper class in a class. Thus, both class limits
are parts of the class interval, e.g., the class intervals of 0-5, 6-10, 11-
15, and so on are inclusive.
 PRASHANT KIRAD

Q4.What are variables, and explain discrete as well as continuous

variables?
Ans:Variation refers to numerical values that keep changing based on
circumstances and time. It got its name, due to its unique
characteristics, which is, that it keeps changing or varying. There are
two kinds of variation that you will learn about in this lesson, which is
discrete and continuous.
Discrete variables refer to whole numbers that tend to increase
finitely. In comparison, a continuous variable is capable of taking up any
numerical value and can increase infinitely. For example, the number of
workers in a factory is a discrete variable, whereas the height and
weight of these workers can be classified as continuous variables.

Q5.Distinguish between a discrete and a continuous variable.

2 t h
Ans:A discrete variable can take only whole numbers. 1
Characteristics: h &
1 tanother.
Cannot take any intermediate a d 1
Increases in finite jumps from one value to
value between whole numbers.
Examples: K ir
a
Number of workers n t
in a factory.
Number ofs
a h
residents in a colony.
PrVariable:
Continuous
A continuous variable can take any numerical value.
Characteristics:
Can take any conceivable value.
Can be broken into infinite gradations.
Examples:
Height
Weight
Distance
Class XI

STATISTICAL ECONOMICS

Tabular Representation of
Data
PRASHANT KIRAD
 PRASHANT KIRAD
Exam mai aayega!
Ch:5 Tabular Representation of Data (EMA)

Methods of Data Display: Tabular and Textual

The presentation of data involves displaying information in a clear and
visually appealing way, making it easy to comprehend and analyze. There
are two main methods for presenting data: textual and tabular.
1. Textual Presentation/Descriptive:
Format: Data is conveyed through paragraphs or descriptive
text.
Example: "Among 10 students in XI commerce, 2 achieved
scores above 90%."
Suitability: Most effective for small data sets where a detailed
narrative is essential.
2. Tabular Presentation:
2th
Format: Data is organized in a systematic manner using tables,
& 1
with rows and columns.
Features:
1th
1
Rows and Columns: Clearly defined rows and columns help
d
ira
structure the data.
t K
Systematic: Data is arranged to facilitate easy comparison
han
and analysis.
s
Pra
Suitability: Best for larger data sets that require structured
and detailed information for enhanced understanding and
analysis.

Example
 PRASHANT KIRAD

Key Elements of a Table: (EMA)

Stub: Titles of the rows of a table.

Caption: Titles of the columns of a table.
Body/Field: Sum total of all the items within the table.
Kinds of Tables:
Tables can be classified based on their purpose, construction, and
originality.
1.According to Purpose
General Purpose Table:
Usage: Not restricted to a specific use.
Function: Acts as a "Data Bank" for researchers.
Example: Census of India.

th
Also Known As: Reference table.
2
Special Purpose Table:
& 1
Usage: Created for a specific purpose only.
1th
Characteristics: Smaller in scope and detail.
d 1
Example: Summary table.
ira
2.According to Originality
t K
han
Original Table:
Description: Data is presented in the same form in which it was
s
Pra
collected.
Derived Table:
Description: Collected data is modified into ratios and
percentages before being presented.
3.According to Construction:
1. Simple/One-way Table
Displays only one characteristic.
2. Complex Table
Displays more than one characteristic.
Types of Complex Tables:
Double/Two-way Table: Shows two characteristics.
Treble/Three-way Table: Shows three characteristics.
Manifold Table: Shows more than three characteristics.
 PRASHANT KIRAD

1.Simple or One-way Table:

This type of table utilizes a single characteristic to present the data.
It is the simplest form of table and is commonly known as a First Order
Table or One-way Table. These tables are used to display univariate
frequency distributions, as they focus on only one variable.
Example:

2 th
& 1
2.Complex Table:
1 t h
A complex table displays data in d 1
accordance with two or more
a
r can be classified into three parts
characteristics. The complex itable
based on characteristics:t
K
(i) Two-way Tableh a n
(also known as Double Table): It provides details on
s
ra of a certain phenomenon that are interrelated to
two characteristics
P
each other.
For instance, the table would change to a two-way table if the number
of students in B.Com in every section was further divided by Morning
and Night shifts.
 PRASHANT KIRAD

(ii) Three-way Table (also known as Treble Table): It provides details

on three characteristics of a certain phenomenon that are interrelated
to each other.
For instance, the table would change to a three-way table if the
number of students in B.Com in every section contains information
regarding morning and night batches, further classified by gender.

2th
& 1
1th
d 1
ira
t K
han
s
Pra

JOSH METER?
 PRASHANT KIRAD

Top 5 Questions
Q1.What is the difference between a General Purpose Table and a
Special Purpose Table?
Ans: A General Purpose Table is used for various purposes and
acts as a comprehensive data bank, suitable for a wide range of
research purposes (e.g., Census of India). A Special Purpose Table,
on the other hand, is created for a specific purpose and typically
has a limited scope, summarizing specific information.
Q2.What are the characteristics of a Simple or One-way Table?
Ans: A Simple or One-way Table displays only one characteristic
or aspect of the data. For instance, it might show the total number
of students in a college.
2 th
Q3.Define a Treble Table and provide an example. 1
h &
1 t
Ans: A Treble Table depicts three characteristics of the data. An
example would be a table showing the1 number of students in a
r
college categorized by class,isex,
d
a and habitation.
t K
h a n
Q4.What are the merits of Tabular Presentation of data?

a s
Ans: The merits of Tabular Presentation include:
Pr representation of data
Concise
Facilitates comparison
Cost-effective
Highlights features
Simplifies analysis (e.g., finding mean, median, etc.)
Q5.Differentiate between an Original Table and a Derived Table.
Ans: An Original Table presents data in the same form as they are
collected. A Derived Table, however, modifies collected data into
ratios and percentages before presentation, typically including
transformed or calculated data.
Class XI

STATISTICAL ECONOMICS
Diagrammatic
Presentation of
Data
PRASHANT KIRAD
 PRASHANT KIRAD

Ch: 6 Diagrammatic presentation of Data

Visual Representation of Data

Geometric Form:
Bar Diagram:
A bar diagram represents data using bars or rectangles, often referred to
as columns.
Basic Features:
Uniform Width: All bars must have the same width.
Equidistant Spacing: Bars should be spaced evenly apart.
Shared Baseline: All bars should align with a common baseline. This
promotes clarity and consistency in data representation, making it easier
to visually compare different data sets.

1. Simple Bar Diagram:

2th
1
Description: Presents a single set of numerical data.
&
1th
Orientation: It can be horizontal or vertical.
1
Example: Data of marks in mathematics for different classes (out of 40).
d
ira
t K
han
s
Pra
 PRASHANT KIRAD

2. Multiple Bar Diagram:

Description: Displays two or more sets of data simultaneously, making it
useful for comparisons.
Example: Marks in mathematics for different classes by Ram and Shyam.

2 th
& 1
1 t h
d
3. Sub-Divided or Component Bar Diagram:
1
i r a as well as individual part values of a
Kof the bars are represented with different
Description: Presents total values
t
h a n
data set. Different parts
colors.
Example:
s
raMarks by 4 students in different subjects in the half-yearly
exam.
P
 PRASHANT KIRAD

4. Percentage Bar Diagram:

Description: Shows different parts of the values of a data set in terms
of percentages. The total always equals 100%.
Usage: Generally used for data of large magnitude.
Example: Number of students passed in different subjects.

2 th
& 1
1 t h
5. Deviation Bar Diagram: d 1
i
Description: Represents bothr apositive and negative deviations from a
t K
baseline.
h a n
Example: Displaying profit and loss for different months of a year
r a s
P
 PRASHANT KIRAD

Exam mai aayega!

Pie Chart (EMA)

Pie diagrams represent data in the form of degrees in a circle.

Steps to Convert Data into Degrees for a Pie Chart
1. Calculate the total of all values.
2. Convert each value into degrees using the formula: {Total value}/times
360).
3. Create a circle.
4. Mark a baseline and then present the data within the circle.

Example: Categories: Rent, Food, Transport, Entertainment

Values: 40%, 30%, 20%, 10%

2th
& 1
1th
d 1
ira
t K
han
s
Pra
 PRASHANT KIRAD

Top 5 Questions
Q1. What are the basic features of a bar diagram?

Ans: The basic features of a bar diagram include uniform breadth (all bars
should have the same breadth), equidistant bars (bars are spaced
equidistantly from each other), and a common baseline (all bars share a
common baseline).
Q2. What are some limitations of index numbers?

Ans: A multiple bar diagram displays two or more sets of data

simultaneously, making it useful for comparisons. For example, it can show
the marks in mathematics for different classes by Ram and Shyam

Q3. What is a sub-divided or component bar diagram?

2 th
& 1
Ans: A sub-divided or component bar diagram presents total values as well as
t h
the individual part values of a data set. Different parts of the bars are
1 by students in different
d 1
represented with different colors, such as marks
subjects in an exam.
ir a
t K
diagram? h a n
Q4. How does a percentage bar diagram differ from a simple bar

r a s
Ans: A Ppercentage bar diagram shows different parts of the values of a
data set in terms of percentages, where the total always equals 100%. It is
generally used for data of large magnitude, unlike a simple bar diagram which
presents a single set of numerical data.

Q5. What type of information does a pie chart visually represent?

Ans: A pie chart visually represents the proportions of different categories

within a whole dataset. Each slice of the pie represents a category's
contribution to the total, making it useful for illustrating numerical
proportions.
Class XI

STATISTICAL ECONOMICS

Frequency Diagrams

PRASHANT KIRAD
 PRASHANT KIRAD

Ch: 7 Frequency Diagrams

Histogram Exam mai aayega!

(EMA)
A histogram is a graphical representation of the frequency distribution of a
continuous series (exclusive series). If the data is in an inclusive series (e.g.,
0-9, 10-19), it must first be converted into an exclusive series before
creating the histogram.
(i) Histogram with equal class interval

2 th
& 1
1 t h
Exam mai aayega!1(EMA)

ir a d
t K
(ii) For unequal classa
h n
intervals, the width of the rectangles in a histogram will

a s
increase or decrease according to the size of the class interval. Before
Prthe data, frequencies for unequal class intervals must be adjusted.
presenting
 PRASHANT KIRAD

Frequency Polygon

A frequency polygon is formed by joining the midpoints of the tops of all

rectangles in a histogram. It can also be created by plotting and connecting
the mid-values of the classes if a histogram is not used.

2 th
& 1
Frequency curve 1 t h
d 1
ir aof a polygon. It is formed using freehand
K lines.
A frequency curve is a variation
t
h a n
smooth curves instead of straight
s
Pra

Ogive or Cumulative Frequency Curve:

Less Than Ogive: A smooth curve starting at the upper limit of the first
class interval, with frequencies added cumulatively.
More Than Ogive: A smooth curve starting at the lower limit of the first
class interval, with frequencies subtracted cumulatively.
 PRASHANT KIRAD

Top 5 Questions
Q1. WWhat is a histogram and how is it created from an inclusive
series?
Ans: A histogram is a graphical representation of the frequency
distribution of a continuous series, depicted using bars of different
heights. To create a histogram from an inclusive series (e.g., 0-9, 10-19),
the data needs to be converted into an exclusive series (e.g., 0-10, 10-20)
first. This adjustment is necessary because histograms require class
intervals to be exclusive to accurately represent the frequency
distribution.
Q2. What are some limitations of index numbers?

Ans: When dealing with unequal class intervals, the width of the bars in a
2 th
histogram will vary according to the size of each class interval. To adjust the
frequencies, use the formula: & 1
1 t h
d 1
The adjustment factor is the ratioir aof the class interval width to a standard
t Kif you have a class interval of 20-40 and a
h
smaller class interval
n
interval width. For example,
a of 10, the adjustment factor is 20/10 = 2 Therefore,
r
the adjusteda s
frequency for the 20-40 interval would be:
P
Q3. How is a frequency polygon formed, and what is an alternative
method if a histogram is not used?

Ans: A frequency polygon is created by connecting the midpoints of the tops

of all bars in a histogram. If a histogram is not available, you can directly
plot and connect the mid-values of the classes to form the frequency
polygon.

Q4. What are the differences between 'Less Than Ogive' and 'More
Than Ogive' cumulative frequency curves?
 PRASHANT KIRAD

Less Than Ogive: Starts at the lower limit of the first class interval and
plots cumulative frequencies as they accumulate.
More Than Ogive: Begins at the upper limit of the first class interval
and plots cumulative frequencies as they decrease.
Q5. What is the purpose of creating a frequency distribution table
before drawing a histogram?

Ans: A frequency distribution table is created to organize data into class

intervals and their corresponding frequencies. This table provides a clear
structure for plotting the histogram, ensuring that each class interval and
its frequency are accurately represented by the height of the bars in the
histogram. It simplifies the process of creating the histogram by providing a
summary of the data.

2th
& 1
1th
d 1
ira
t K
han
s
Pra
Class XI

STATISTICAL ECONOMICS

Time Series Graph

PRASHANT KIRAD
 PRASHANT KIRAD

Ch:8 Time Series graph

False Base Line: 2 th

We already know that the scale of the Y-axis should
1
&start at zero. But
1
if this rule is carefully followed and there
h
tis a significant distance
between zero and the variable’s d
1
smallest value, the curve will be
ir a the origin. For instance, if the
strongly pulled up and away
t Kits following values only change by very
from

small amounts,sah
a n
variable starts at 1,000 and
large amount of space would be needed to display the
rafalse base is used to solve this problem.
PThe
variable.
Example: The following data shows the annual salary of the employees
in different years.

JOSH METER?
 PRASHANT KIRAD

Solution:

In this graph, a false base line is used to present the time series data.
th
This is so because the lowest value is 25 and after that, the value
2
1
increases. Moreover, it also facilitates meaningful presentations and
&
saves a lot of space.
1 t h
One Variable Graph:
d 1
The X-axis is used to measureir a and the Y-axis is used to measure
time,
t
the value of the variable ifK
there is just one variable to be presented.
h a n
In this graph, plotting the various time points against the respective
values andra
s
linking them with straight lines is done. The fluctuation of
P
the mentioned line represents variations in the variable, and the
distance of the points from the graph’s base line denotes the
magnitude.
Example:
 PRASHANT KIRAD

Solution:

Exam mai aayega!

2 t h
(EMA)

Two or more than two Variables Graph: 1

h & it is best to use
1 t
If two or more values are plotted on the same graph,
1 broken, or thick lines. This
different types of lines, such as dotted,
d
adisplay data on exports and imports,
type of graph is generally usedrto
i
K
maximum and minimumt temperatures, mortality and birth rates,
a n
revenues and expenses,
h etc. The variables can either be specified in
s“different units” when two or more variables are to be
“same units”aor
r
Pthe same graph.
shown on
Example:
 PRASHANT KIRAD

Solution:

2 th
The graph shows two curves, one for the imports and one for the
1
exports. In this, time is shown along the X-axis, and Exports/Imports
&
are shown along the Y-axis.
1 t h
Merits of Diagrammatic & Graphic d 1 Presentation:
ir a
t
1.No Need for Specialized K Knowledge: Can be interpreted by
individuals withouta
h n
advanced statistical expertise.
a
2.Shows Trends:
r s Effectively highlights trends and patterns in the
data. P
3.Easy to Understand: Makes data simple to comprehend at a glance.
4.Easily Comparable: Facilitates quick and clear comparisons between
data sets.
5.Study of Correlation: Helps in identifying relationships and
correlations between variables.
6.Visual Impact: Engages the audience and highlights key trends or
patterns effectively.
7.Simplification of Data: Large amounts of data can be summarized
and presented in a more digestible form.
 PRASHANT KIRAD

Top Questions

Solution:

2th
& 1
1th
d 1
ira
t K
han
s
Pra
Solution:
Class XI

STATISTICAL ECONOMICS

Measures of Central
Tendency (Mean)
PRASHANT KIRAD
 PRASHANT KIRAD

Ch:9 Measures of Central Tendency(Mean)

Definition and types:
Definition:
Measures of central tendency refer to statistical methods used to
determine the average or central value of a dataset. An average
provides a brief and simple representation of the entire group.
Types of Measures of Central Tendency:
1. Mathematical Averages
2. Positional Averages
1.Mathematical Averages:
1. Arithmetic Mean (AP, GP, HP)
2. Geometric Mean
3. Harmonic Mean 2th
2.Positional Averages: & 1
1. Median 1th
2. Mode
d 1
ira
Arithmetic Mean (Mean):
t K
Definition: A simple measure of central tendency commonly known
han
as the “mean.”
s Sum of all items
Pra
Basic Formula: Mean =
Number of items
X1 + X2 + X3 + .............. Xn = ΣX
Standard Formula: X = N
N

Types of Mean:
1. Simple Mean:
Calculated without considering any weights or importance of
different items in the dataset.
2. Weighted Mean:
Calculated by assigning weights to different items based on
their importance.
 PRASHANT KIRAD

Calculation of simple mean (methods)

1.In case of individual series
A. Assumed mean method

Steps:
Step 1- One element is taken as "assumed mean" (preferably be
middle element and denoted as ‘A’)
Step 2- Deviation of values from 'A' is calculated ie. X - A (denoted
by ‘d’)
Step 3- Sum total of 'd' → Σd
Example:

Solution: 2 th
& 1
At
X =1 +
h
Σd
(Formula)
d 1 N

ira
t K 17
han X=8+
10

ras
P
(Mean) X = 9.7
 PRASHANT KIRAD

B. Direct Method:

Solution:
ΣX
X = (Formula)
N

300
X=
5

(Mean) X = 60
2 th
& 1
Exam mai aayega!
C. Step-deviation method
1 t h (EMA)
Steps:
Step 1- One element is taken a asd
1
"assumed mean"
Kir element and denoted as ‘A’)
(preferably be middle
Step 2- Deviationn oftvalues from 'A' is calculated i.e. X-A
s h a
(denoted by ‘d’)
Step
a
P3-r Sum total of 'd' → Σd
Step 4- Large value of deviations are divided by common factor 'C'
(denoted by ‘d’)

d' = d = (x - A)
C C
(Formula) x̄ = A + Σd’
X C
N
Example:
 PRASHANT KIRAD

Solution:

x̄ = 60 + 0
X 5
5
2th
(Mean) x̄ = 60
& 1
2. In case of discrete series
1th
A. Direct method
(Formula) x̄ = ad
Σfx
1
Where: K r
i Σf
fx = (f) x (X) a n t
f = Frequencysh
ProfaFrequencies
Σf = Sum
Example:

Solution:

264
x̄ =
28

(Mean) x̄ = 9.42
 PRASHANT KIRAD

(EMA)
B. Assumed mean method
Steps:
Step 1- One element is taken as "Assumed mean (denoted as 'A')
Steps 2- Deviation of values (x) from A is calculated i.e.
(EMA)X - A
(denoted as 'd')
Step 3- Multiplication of f and d
Step 4- Add f.d → Σfd

(Formula) x̄ = A + Σfd
Σf
Example:

Solution: 2th
& 1
1th
d 1
ira
t K
han
s
Pra

x̄ = 25 + (-3)
40
x̄ = 25 - 0.075

(Mean) x̄ = 24.925
 PRASHANT KIRAD

(EMA)
C. Step deviation method
Steps:
Steps 1- One element is taken as "Assumed mean (denoted as 'A')
Steps 2- Deviation of values (x) from A is calculate i.e. X - A
(denoted as 'd')
Step 3- Divide d by a common factor c
Step 4- Multiply d’ and f
Step 5- Add f.d’= Σf.d’

(Formula) x̄ = A + Σf.d ’ x C
Σf
Example:

2th
& 1
Solution: 1th
d 1
ira
t K
han
s
Pra

x̄ = 60 + -20
X 10
50

(Mean) x̄ = 56
 PRASHANT KIRAD

3. In case of continuous series

A. Direct method
Steps:
Step 1- Find mid values of class intervals i.e. l1 + l2/2
Step 2- M is multiplied by frequency fm

(Formula) x̄ = Σfm
Σf
Example:

Solution:
2th
& 1
1th
d 1
ira
t K
han
s
Pra
x̄ = 2150
50

(Mean) x̄ = 43

(EMA)
B. Assumed mean method
Steps:
Step 1- Find mid value i.e. l1+ l2/2 (denoted by m)
Step 2- One element is taken as assumed mean from m
(denoted as 'A')
 PRASHANT KIRAD

Step 3- Deviation of mid -values from A is calculated m-A

(denoted by ‘d’)
Step 4- And then d is multiplied by f

(Formula) x̄ = A + Σfd
Σf
Example:

Solution:

2th
& 1
1th
d 1
ira
t K
han
s
Pra
x̄ = 45 + (-100)
50

(Mean) x̄ = 43 (EMA)
C. Step deviation method
Steps:
Step 1- Find mid value i.e. l1+ l2 / 2 (denoted by m)
Step 2- One element is taken is assumed mean from m
(denoted as 'A')
Step 3- Deviation of mid -values from A is calculated m-A
(denoted by d)
 PRASHANT KIRAD

Step 4- 'd' is divided by a common factor (c) (denoted by d')

Step 5- d' is multiplied by f which is f.d’

(Formula) x̄ = A + Σf.d’ x C
Σf
Example:

2th
& 1
1th
d 1
ira
t K
han
s
Pra

x̄ = 50 + (-15)
X 20
50

x̄ = 50 - 6

(Mean) x̄ = 44
 PRASHANT KIRAD

Corrected Arithmetic Mean:

When calculating the arithmetic mean, an error might occur if a value
is mistakenly recorded. This leads to an incorrect mean. To rectify
this, the corrected mean can be calculated using the following
Formula:
X corrected​= X(wrong) + corrected value - incorrect value
N
Where:
X (corrected)​is the corrected mean.
X (wrong​) is the initially calculated (incorrect) mean.
Correct Value is the actual value that should have been recorded.
Incorrect Value is the wrong value that was mistakenly recorded.
th
N is the total number of observations.
2
1
Example: The mean of 10 students' scores was calculated as 50.
&
th
However, it was later discovered that one score was mistakenly
1
1
recorded as 56 instead of the correct value of 65. Find the correct
d
mean.
ira
Solution:
t K
han X corrected​ = 50 + 65 - 56
s 10
Pra = 50 + 9
10

= 50+ 0.9 = 50.9 (Ans)

Therefore, the corrected mean of the students' scores is 50.9.

Weighted Arithmetic Mean:

In calculating the simple arithmetic mean, all values are treated as
equally significant. However, in some cases, certain values are
considered more important or carry more significance than others.
This is where the weighted arithmetic mean comes into play.
 PRASHANT KIRAD

The weighted arithmetic mean is calculated using the following

formula:
(Formula) X weighted = Σ(W×X)​
ΣW​
Where:
Xˉweighted​is the weighted mean.
W represents the weight or significance assigned to each value.
X represents the individual values.
Σ(W×X) is the sum of the product of weights and corresponding
values.
ΣW is the sum of all weights.
Example- A student receives grades in three different subjects:
th
Math, Science, and English. The weights assigned to these subjects
2
1
based on their importance are 4, 3, and 2, respectively. The grades
&
received are as follows:
Math: 85 1 t h
Science: 90 d 1
ir a
English: 80
t K
Solution:
h a n
s
Calculate the Product of Each Weight and Grade:
Pra (W x X ) 4 x 85 = 340 (Math)
3 x 90 = 270 (Science)
2 x 80 = 160 (English)

Sum of the Products: Σ(W×X)=340+270+160=770

Sum of Weights: ΣW=4+3+2=9
Calculation of Weighted Arithmetic Mean:

X weighted = 770​= 85.56 (Ans)

9
 PRASHANT KIRAD

Combined Arithmetic Mean:

The combined arithmetic mean is used when you need to find the
average of two or more groups with different means and sizes. This is
particularly useful when dealing with data from multiple sources or
periods.

(Formula) X12​= X1​×N1​+X2​×N2​​

N1​+N2​​

Where:
X12​is the combined mean.
X1 & X2​are the means of the two groups.
N1​& N2​are the sizes of the two groups.
2th
N1+N2​is the total number of observations across both groups.
& 1
Example: Consider two classes, A and B, with the following details:
th
Class A has 30 students with an average score of 70.
1
1
Class B has 20 students with an average score of 80.
d
Solution: ira
t K
Apply the Formula: X12​= (70×30)+(80×20)​​
han 30 + 20
s
Pra
Calculate the Combined Sum: X12​= 2100+1600​​
50

X12​= 3700​
50

X12​= 74 (Ans)
 PRASHANT KIRAD

(EMA)
Find missing frequency:
If the mean of the following distribution is 28, locate the missing
frequency.
Example:

Solution:

2th
& 1
1th
d 1
ira
t K
han
s
Pra
X​= ∑fX
∑f
28 = 1030+15f​
34 + f
952 + 28f = 1,030 + 15f
28f – 15f = 1,030 – 952
13f = 78
f=6
Missing Frequency = 6 (Ans)
 PRASHANT KIRAD

Top Questions
Q1.What is the Corrected Arithmetic Mean?
Ans: The Corrected Arithmetic Mean is the recalculated mean of a
dataset when an error in one or more data values is discovered. It is
calculated by adjusting the sum of the data values by replacing the
incorrect value with the correct one.
Q2.How is the Midpoint of a Class Interval Calculated?
Ans: The Midpoint of a Class Interval is calculated by averaging the
lower and upper limits of the interval. Thus, the formula is m = l1+l2/2
Q3.Define Weighted Arithmetic Mean.
Ans: The Weighted Arithmetic Mean is a mean where different data
points are given different levels of importance (weights). It is
2 th
calculated by multiplying each data point by its respective weight,
& 1
summing these products, and dividing by the sum of the weights.
Q4.Define Assumed Mean Method.
1 th
Ans: The Assumed Mean Method is d 1
a technique used to calculate the
mean of a dataset by selecting a
ir an assumed mean (A) from the data,
K
calculating deviations ofteach data point from this assumed mean, and
a n to find the actual mean.
then using thesehdeviations
ra s
P
Class XI

STATISTICAL ECONOMICS

Measures of Central Tendency

(Median & Mode)

PRASHANT KIRAD
 PRASHANT KIRAD

Ch:10 Median & Mode

Positional Averages:
Positional Averages are measures of central tendency that identify
specific positions within a data set. Unlike the mean, which considers
all data points, positional averages focus on certain points or positions
in the data distribution.
1. Median:
Definition: The median is the value that separates the data set into
two equal halves, with 50% of the data points lying below and 50%
above it.
Calculation:
th
If the number of observations (N) is odd, the median is the middle
2
value.
& 1
values. 1 t h
If NNN is even, the median is the average of the two middle

d 1
2. Mode:
ir a
t K
Definition: The mode is the value that appears most frequently in a
data set.
h a n
a s
Characteristics:
r
P set can have more than one mode (bimodal, multimodal)
A data
or no mode at all.
Useful for categorical data where we wish to know the most
common category.
3. Partition Values:
Definition: Partition values divide the data into specific equal
parts. Common partition values include quartiles, deciles, and
percentiles.
 PRASHANT KIRAD

A) Quartile:
Definition: Quartiles divide the data into four equal parts.
Types:
Q1 (First Quartile): 25% of the data falls below this value.
Q2 (Second Quartile): Equivalent to the median; 50% of the data falls
below this value.
Q3 (Third Quartile): 75% of the data falls below this value.
B) Decile:
Definition: Deciles divide the data into ten equal parts.
Types:
D1 (First Decile): 10% of the data falls below this value.
D2 (Second Decile): 20% of the data falls below this value, and so
on up to D9.
C) Percentile: 2th
& 1
Definition: Percentiles divide the data into 100 equal parts.
Types:
1th
1
P1 (First Percentile): 1% of the data falls below this value.
d
ir a
P50 (50th Percentile): Equivalent to the median.
t K
P99 (99th Percentile): 99% of the data falls below this value.

h a n Exam mai aayega!

Calculationsof Median:
P ra (EMA)

A) In case of Individual series

Step 1- Firstly, arrange the given data in ascending or descending
order.
Step 2- Apply the following formula of Median:
Median (M) = size of(N + 1)th item
2
Median in case of Odd and Even Number of Items
In case of odd number of items, Median is the Middle term of the
observation. However, in case of even number of items, the Median is
the average of two middle terms and is determined by using the
following formula:
Median (M) = size of (N)th item + size of (N+1)th item
2 2
2
 PRASHANT KIRAD

Example:

Solution:

Median (M) = size of(12 + 1)th item

2
Median (M) = size of 6.5th item
B) In case of Discrete series 2th
& 1
The steps required to determine median of a discrete series are as
follows:
1 t h
1
Step 1: Arrange the given distribution in either ascending or
d
descending order.
ira
t K
Step 2: Denote the variables as X and frequency as f.
an
Step 3: Determine the cumulative frequency; i.e., cf.
h
s
Pra
Calculate the median item using the following formula:
Median (M) = ( N+1 )th item
2
Example:

Solution:
(M) = (49+1 )th item
2
= Size of 25th item
Median = 2,500 (Since the
25th item falls under the
cumulative frequency 27)
 PRASHANT KIRAD

c) In case of Continuous series

Step 1: Arrange the given data in either descending or ascending
order.
Step 2: Determine the cumulative frequency; i.e., cf.
Step 3: Median Class will be identified i.e. class corresponding to
the cumulative frequency which includes N/2 th item.
(Formula) M = l1 + (N/2) - C.F x i
f
Where,
l1 = lower limit of the median class
c.f. = cumulative frequency of the class preceding the median class
f = simple frequency of the median class
i = class size of the median group or class
Example:
2th
& 1
1th
d 1
ira
t K
han
s
Pra
Solution:

Median (M) = Size of [N​]th item

2
= Size of [30​]th item = Size of 15th item
2
(l1 = 15, f = 8, i = 5, c.f. = 12)
30 ​− 12 ​
Median = 15 + ​ 2
8 X 5

Median = 16.875 (Ans)

Note: In case of inclusive series, median can be calculated only after its
conversion into exclusive
 PRASHANT KIRAD

(EMA)
Quartile:
Calculation- A) In case of Individual & Discrete series:
First Quartile- Q1 Lower Quartile
Q2- Median
Q3- Upper Quartile
Q1 = Size of (N + 1)th item
4
Q3 = Size of 3 (N + 1) th item .
4
B)In case of contineous series:
For the Q1 Class Interval for Q1 = (N+1)/4 th item
Q1 = l1 + [N/4 - c.f] x i
f 2th
For the Q3 Class Internal of Q3 = 3 (N/4) th item & 1
1 th
Q3 = l1 + (3 (N/4)- c.f) x i
d f1
ir a
Decile (10parts):
t K
h
Calculation- A) In a n
case of Discrete & Individual series:
s
D1 = (Nr+a1)th item
P 10
D4 =4 (N + 1)th item
10
D9 =9 (N + 1)th item and so on.
10
B) In case of continuous series:
For D4 = C.I for D4 = 4 (N/10)th item
D4 = l1 + { 4(N / 10) - c.f} x i (Similary for others values)
f
 PRASHANT KIRAD

Percentile (100parts):
P50 = Median
Calculation- A) In case of Discrete and Individual series:
P1 = ( N + 1 )th item
100
P5 = 5 ( N + 1 )th item
100
P99 = 99 ( N + 1 )th item
100
B) In case of Continuous series:
For P9 = C.I for P5 = 5 (N / 100) th item
P5 = l1 + {5 ( N / 100)- C.f} x I
f 2th
Mode: & 1
h
1t in a data set which
The mode is the value that appears most1 frequently
is the highest frequency. a d
irof Individual Series:
t K
Calculation of mode- A) In case

h a n
ra s
P
It is visible that variable 20 has the
highest frequency value of 8.
Therefore,

Mode (Z) = 20 (Ans)

 PRASHANT KIRAD

B) In case of Discrete Series:

i) Inspection method (highest frequency class just by looking)
ii) Grouping method- highest frequency or where more than one
variable shows the highest frequency value. Under such a situation, the
Grouping Method of calculating mode is used
Example:

2th
& 1
1th
d 1
ira
t K
h a n
s
Praof Grouping table:
Preparation
1. Firstly, take the given frequencies in column 1.
2. Then take the sum of frequencies in two(s) in column 2.
3. Now in column 3, take the sum of frequencies in two(s), starting
from the second value of the given frequencies.
4. Take the sum of frequencies in three(s) in column 4.
5. In column 5, take the sum of frequencies in three(s), starting from
the second value of the given frequencies.
6. Lastly, in column 6, take the sum of frequencies in three(s),
starting from the third value of the given frequencies.
 PRASHANT KIRAD

Analysis table: 2 th
& 1
The highest frequency of every column (as per grouping table) is
th
ticked as given. According to the analysis table, the highest number of
1
1
ticks(✓) is against the variable 6. Therefore,
d
i
Modera(Z) = 6 (Ans)
t K
h a n
C) In case of Continuous Series:

a modalP
s
Under continuous series, by using any of the 2 method we will find out
ra by Inspection method or Grouping method and apply the
class
given formula.
Inspection method:

Mode (Z) = l1 + f1-f0 x i

2f1-f0-f2

Where:
l1 = Lower limit of modal class
f1 = Frequency of modal class
f0 = Frequency of class preceding the modal class
f2 = Frequency of the class succeeding the modal class
i = Class interval of the modal class
 PRASHANT KIRAD

Example:

Solution:

Where, l1 = 20, f1 = 15, f2 = 8,

f0 = 10, and i =10

2 th
Mode (Z) = 20 + 15-10 x 10
& 1 2(15) - 10 - 8

1 th
d 1 (Z) = 2030+ 5- x1810
Mode
ira
t K Mode (Z) = 20 + 50

han 12
s
Pra Mode (Z) = 24.16 (Ans)
Example of Grouping Method: Grouping table:
 PRASHANT KIRAD

Solution:

Where, l1 = 20, f1 = 24, f2 = 21, f0 = 13, and i = 5

2 th
Mode (Z) = 20 + 24-13 x 5
& 1
2(24) - 13- 21

1
Mode (Z) = 20 + 11 x 10 th
48d- 34
1
i ra
t K
Mode (Z) = 20 + 55

han 14
s
Pra Mode (Z) = 23.92 (Ans)
(EMA)
Relation between mean, median & mode:
(formula) mode = 3 median - 2 mean
Z = 3M - 2x̄

Application of the formula:

This formula is useful in understanding the skewness of the data.
If the data is symmetrically distributed, the mean, median, and
mode are close to each other. However, in a skewed distribution,
they differ, and the formula helps in estimating one measure if the
other two are known.
 PRASHANT KIRAD

Top Questions
Q1.What is the grouping method used for in statistical analysis?
Ans: The grouping method is employed when there is a tie or a "tough
fight" among multiple classes with high frequencies in a discrete
series. It involves grouping these classes to determine the one with
the highest frequency
Q2.How are quartiles defined in statistics?
Ans: Quartiles divide a dataset into four parts. The first quartile (Q1)
is the median of the lower half, the second quartile (Q2) is the median
of the entire dataset, and the third quartile (Q3) is the median of the
upper half
Q3.When is the inspection method used in statistical analysis?
th
Ans: The inspection method is used to quickly identify the class with
2
1
the highest frequency in a discrete series by visually inspecting the
&
data.
1 t h
Q4.When is the inspection method used
d 1in statistical analysis?
a to quickly identify the class with
Ans: The inspection method isirused
t
the highest frequency in
K
a discrete series by visually inspecting the
data. h a n
s
risathe method used to find the median in a continuous
Q5.What
series?
P
Ans: The median in a continuous series is found by identifying the class
corresponding to the cumulative frequency that includes N/2th item,
where N is the total number of observations.
Class XI

STATISTICAL ECONOMICS

Correlation
PRASHANT KIRAD
 PRASHANT KIRAD

Ch:11 Correlation
Definition:
Correlation refers to the relationship or connection between two or
more variables, groups, classes, or series. It indicates how one variable
may predict or be related to another.
Significance of Correlation:
1. It helps determine the degree of correlation between the two
variables in a single figure.
2. It makes understanding of economic behaviour easier and identifies
critical variables that are significant.
3. When two variables are correlated, the value of one variable can be
estimated using the value of the other. This is performed with the
regression coefficients.2th
& 1
4. In the business world, correlation helps in taking decisions. The
1th
correlation helps in making predictions which helps in reducing
d 1
uncertainty. It is so because the predictions based on correlation
ira
are probably reliable and close to reality.
t K
han
s
Pra
 PRASHANT KIRAD

Positive Correlation:
Definition: Positive correlation occurs when two variables move in the same
direction. If one variable increases, the other also increases, and if one
decreases, the other decreases.
Examples:
Price and Supply: As the price of a product increases, the supply
generally increases as well.
Income and Expenditure: Higher income often leads to higher
expenditure.
Height and Weight: Taller individuals tend to have a higher weight.

2 th
& 1
1 th
d 1
i ra
Negative Correlation: t K
h a
Definition: Negative
ncorrelation occurs when two variables move in
s
ra If one variable increases, the other decreases, and
opposite directions.
P
vice versa.
Examples:
Price and Demand: As the price of a product increases, demand for
it usually decreases.
Temperature and Sale of Woollen Garments: As the temperature
rises, the sale of woollen garments typically decreases.
 PRASHANT KIRAD

Linear Correlation:
Definition: Linear correlation occurs when a constant change in one
variable results in a proportional change in another variable.
Characteristics: The two variables change in the same ratio. If
plotted on a graph, the relationship between the two variables is
represented by a straight line.
Implication: A linear relationship suggests that the variables have a
consistent and predictable connection.

2 th
The ratio of change of variables X and Y in the above schedule is 1:2
& 1
and it remains the same, thus there is a linear relationship between the
variables.
1 t h
Non-Linear Correlation: a d 1
K ir
a n t
Definition: Non-linear (curvilinear) correlation occurs when changes in
one variable dohnot result in a constant or proportional change in
ra s
another variable.
P
Characteristics:
The variables do not change in the same ratio.
The relationship between the variables does not form a straight
line when plotted on a graph.
Example:
Doubling the use of fertilizers does not necessarily result in a
proportional increase in grain production, indicating a non-linear
relationship.
 PRASHANT KIRAD

In the above schedule, there is no specific relationship between the

variables. Even though both change in the same direction i.e. both are
increasing, they change in different proportions. The ratio of change
of variables X and Y in the above schedule is not the same, thus there
is a non-linear relationship between the variables.

Simple Correlation:
Definition: Simple correlation studies the relationship between only
two variables.
Examples:
2 th
Price and Demand: Analyzing how changes in price affect demand.
& 1
Price and Money Supply: Examining the relationship between price
levels and the money supply.
1 t h
d 1
Partial Correlation:
i r a
t K studies the relationship between two
Definition: Partial correlation
h a n
variables while keeping other influencing variables constant.
Example:ra
s
P
Production of Wheat: Wheat production depends on factors like
rainfall, manure quality, and seed quality.
Partial Correlation Study: If the relationship between wheat
production and seed quality is analyzed while keeping rainfall and
manure constant, it demonstrates partial correlation.

Multiple Correlation:
Definition: Multiple correlation involves studying the relationship
between three or more variables simultaneously.
Characteristics:
Both independent and dependent variables are analyzed together.
Example:
Examining the relationship between wheat output, quality of seeds,
and rainfall.
 PRASHANT KIRAD

Degree of Correlation:

Exam mai aayega!

Methods of estimating correlation: (EMA)

1.Scattered Diagram:
2 t h
Definition: 1
& that shows the
1 h
A scattered diagram is a graphical representation
t two variables.
1
direction and degree of correlation between
d
ira
Each value is represented by a dot on the graph.
Features:
The pattern andn t K
closeness of the dots indicate the direction
h a
(positive orsnegative) and the strength of the relationship between
theP ra
variables.
Merits:
Simple and Easy: Easy to create and interpret.
Visual Representation: Clearly shows the nature of the relationship
(positive or negative).
Quick Insight: The correlation can be observed at a glance.
Demerits:
Lack of Precision: Does not provide an exact measure of the
correlation.
Limited to Visual Approval: Only offers a visual representation
without numerical precision.
Quantitative Limitation: Can only express the correlation
quantitatively, not qualitatively.
 PRASHANT KIRAD

Example:

The scatter diagram shows that there is an upward trend of the points
from the lower left-hand corner to the upper right-hand corner of the
graph. In short, there is a Positive Correlation between the values of
X and Y variables. 2 th
& 1
Karl Pearson’s Coefficient of Correlation: h
1 t
1formula for the measurement
The first person to give a mathematical
d
ir a two variables in 1890 was Karl
of the degree of relationship between
K
Pearson. Karl Pearson’stCoefficient of Correlation is also known as
a n
Product Moment Correlation
h or Simple Correlation Coefficient.
r a s
P (Formula) (x = x - x̄ , y = y - ȳ)

Short cut method:

Where:
dx = deviation of series X from the assumed
mean = (X - A)
dy = deviation of series Y from the assumed
mean = (Y - A)
 PRASHANT KIRAD

Σdxdy = sum of multiple of dx and dy

Σdx2 = sum of square of dx
Σdy2 = sum of square of dy
Σdx = sum of deviation of series x
Σdy = sum of deviation of series y
N = total number of items
Example:

2th
& 1
Solution:
1th
d 1
ira
t K
han
s
Pra
r=

r=

r=

r= r = + 0.97 (High degree of

positive correlation)
 PRASHANT KIRAD

Step Deviation method:

(Formula)

Note: The value of the correlation coefficient 'r' lies between -1 and 1,
where -1 indicates a perfect negative linear relationship, 0 indicates no
linear relationship, and +1 indicates a perfect positive linear relationship.
Exam mai aayega!

2th
Spearman's rank correlation co-efficient (EMA)

& 1
Related to qualitative variables (attributes) such as beauty, wisdom, ability, etc., their

th
values cannot be expressed numerically. However, their relative importance or ranks can
1
1
be determined based on qualitative assessments or rankings.
d
ira
t K
Example
han
s
Pra
Calculate rank correlation between advertisement cost and sales as per the data given below

Soln:

JOSH METER?
 PRASHANT KIRAD

Top 5 Questions
Q1.Calculate coefficient of correlation for the ages of husband and
wife.

Answer:

2 th
& 1
1 t h
d 1
ira
t K
h a n
s
Q2.Find out the correlation between the marks in Statistics and
Pra
marks in Accountancy:

Answer:
 PRASHANT KIRAD

Q3.Calculate Karl Pearson's coefficient between the marks (out of

30) in English and Hindi obtained by 10 students.

Answer:

2th
& 1
1th
d 1
ira
t K
han
s
Pra
Q4.How does a scatter diagram facilitate quick insights into data
relationships?
Answer: By examining a scatter diagram, one can immediately discern the nature
(positive or negative) and strength (closeness of points to a trend) of the
relationship between variables without needing to perform detailed statistical
calculations.

Q5.Can qualitative attributes like beauty or wisdom be analyzed

using correlation coefficients? If not, how are they typically
evaluated?
Answer: No, qualitative attributes cannot be analyzed using correlation
coefficients because they do not have numerical values. Instead, their relative
importance or rankings are determined through qualitative assessments or
rankings based on subjective criteria and expert judgment.
Class XI

STATISTICAL ECONOMICS
Index Number
PRASHANT KIRAD
 PRASHANT KIRAD

Ch:12 Index Number

Index Number:
An index number is a statistical measure used to track changes in a variable
or a set of related variables over time, across different geographic
locations, or other dimensions. In an index number system, the prices (or
quantities) from a specific year are compared to those from a designated
base year. The value of the base year is set to 100, which facilitates the
calculation of percentage changes in the values of various variables over
time. The base year acts as the reference point for these comparisons.
Features:

Percentage Change: Measures the change in variables as a percentage.

Quantitative Expression: Provides a numerical representation of
changes. 2th
& 1
Average Change: Indicates the average variation over a period.
th
Relative Change Over Time: Compares changes relative to a specific
1
period.
d 1
ir a
In Relation to Some Base: Uses a base year as a reference point for
comparison.
t K
Challenges in h a n
Constructing Index Numbers:
ra s
P
Purpose and Objective:
Index numbers are created for different purposes:
The Consumer Price Index (CPI) tracks changes in the cost of living.
The Wholesale Price Index (WPI) measures changes in wholesale
prices.
Clearly defining the purpose is crucial before constructing an index
number.
Base Year Selection:
The base year serves as the reference point for comparison.
An ideal base year should be free from unusual fluctuations to ensure
reliable comparisons.
 PRASHANT KIRAD

Selection of Prices:
Decide whether to use wholesale prices, retail prices, or open market
prices for the index.
Selection of Formula:
Select the most suitable formula from the available options.
Exam mai aayega!
Simple and Weighted Index Numbers: (EMA)

Simple Index Numbers: Assign equal weight to all items in the series.
Weighted Index Numbers: Assign different weights to items based on
their relative importance.

Simple Methods:
Simple Average of Price Relatives
Simple Aggregative Method
Weighted Methods:
2 th
Weighted Average of Price Relatives Method
& 1
Weighted Aggregative Method
1 t h
Simple Aggregative Method: d 1
ir a
In this method, the total t K of commodities in the current year are
prices
divided by the totala
h n
prices of those same commodities in the base year, and

r a
then the resultsis multiplied by 100.
P1= P
Prices of the commodities in the current year
P0= Prices of the commodities in the base year
P01=Price index of the current year

Formula: -->

The Simple Average of Price Relatives Method involves calculating the price
relative, which is the percentage ratio of a commodity's price in the current
year compared to its price in the base year. This method averages these
percentage ratios to analyze price changes over time.
 PRASHANT KIRAD

Weighted Method:

1.Weighted Average of price Relative

2. Weighted Aggregative Method: 2th

& 1
Weights are based on quantities purchased in:
Current year
1th
Base year
d 1
Both years
ira
t K
Methods:
h a n
r a s
Paasche Method:
P

Laspeyres Method:

Fisher's Method:
 PRASHANT KIRAD

Consumer Price Index (CPI) or Cost of Living Index:

The CPI measures the average price change experienced by a specific group
of consumers for goods and services they typically purchase, comparing the
current year to a base year. It is calculated for:

Industrial Workers (IW)

Urban Non-Manual Employees (UNME)
Agricultural Labourers (AL)

Methods of Constructing CPI:

1.Aggregative Expenditure Method:
This method is akin to Laspeyres' Method.
2.Family Budget Method

CPI Formula: Exam mai aayega!

2th
(EMA)
& 1
Aggregative Expenditure Method:
1th
d 1
ira
t K
h a n
Where:
a s year price relative
R is thercurrent
P
W is the weight of various items

Similar to Laspeyre's Method:

These methods are used to calculate the Consumer Price Index (CPI), which
measures the average change in prices paid by consumers for a basket of
goods and services over time.
 PRASHANT KIRAD

Wholesale Price Index (WPI):

The WPI tracks the relative changes in the prices of commodities traded in
the wholesale market.
Uses:
Forecasting demand and supply
Estimating real values
Indicating the rate of inflation

Index Number of Industrial Production:

This index measures the relative increase or decrease in industrial output
compared to the base year level of production.
Industries are classified into three categories:
1.Mining
2.Manufacturing
3.Electricity
2th
& 1
1 t h
d 1
Where:
a
iinr the current year
K
O1 is the level of production
t
h a n
O0 is the level of production in the base year

ra s
W is the weight
P
Advantages of Index Numbers:
Simplification of Data: Transforms complex data into a more
comprehensible format.
Comparison Over Time: Allows effective comparison of economic
variables across different time periods.
Comparison Across Regions or Groups: Enables comparisons between
various regions, sectors, or groups.
Measurement of Inflation and Cost of Living: Crucial for calculating
inflation rates and adjusting for cost of living.
Policy Formulation and Evaluation: Provides essential data for informed
policy-making and assessment.
 PRASHANT KIRAD

Limitations of Index Numbers:

Choice of Base Year: An inappropriate base year can lead to misleading
conclusions.
Quality Changes: Often fail to account for changes in the quality of
goods and services.
Selection of Items: The selected items may not accurately represent
the entire population.
Weighting Issues: Incorrect weighting can distort the index.
Lack of Individual Variation: Reflects general trends but does not
capture individual or specific variations.

2th
& 1
1th
d 1
ira
t K
han
ras
P
 PRASHANT KIRAD

Top 5 Questions
Q1. What are some advantages of using index numbers?

Ans: Index numbers simplify data, enable comparisons over time and
between regions, measure inflation and cost of living, and aid in policy-
making.

Q2. What are some limitations of index numbers?

Ans: Limitations include an inappropriate base year, lack of quality

adjustments, inaccurate item selection, weighting issues, and lack of
individual variation.

Q3. How does the Wholesale Price Index (WPI) serve economic
analysis?

2 th
Ans: The WPI measures the relative changes in the prices of commodities in
& 1
the wholesale market. It helps in forecasting demand and supply, estimating
real values, and indicates inflation rates.
1 t h
Q4. What is the Consumer Price Index d 1
(CPI) used for?
ir a
t
Ans: The CPI quantifies the K
average price change paid by consumers for

ha n
goods and services, allowing for comparisons with a base year. It is used to
r a s adjust cost of living, and inform economic policy.
measure inflation,
P
Q5. How are industries classified in the Index Number of Industrial
Production?
Ans: Industries are classified into three main categories for the Index
Number of Industrial Production: Mining, Manufacturing, and Electricity.
This classification helps track changes in production levels across different
sectors.