Statistical Method

Systematic presentation we reduce the meaningless mass of statistical data through the tables, charts etc.

  • Sometimes we need to compare one table with another table and one frequency distribution with another frequency distribution.

  • At that time we require tools or methods to make such comparisons.

  • One set of statistical tool found in ratio, rates and percentages.

  • Another set of statistical tool is found in the averages or measures of central tendency.


  • Comparing two numerical values by division is the ratio method of comparison.

  • Ratio is the relationship between two quantities which called terms.

  • It is necessary to determine (a) What is compared (First term) and With which it is to be compared (Second term).

  • Calculated by dividing the first term by the second term.

  • Expressed in words, symbol and fraction.

  • Ratio will be reverse when first and second terms are interchanged.

    Ratio Equation

For example: Equation

Forms of expression of ratio:

  • In words: The ratio of Rs. 6 to Rs. 2

  • In symbol: Rs.6: Rs.2

  • In fraction: Equation

Examples of certain ratios used in Economics:

Table shows the examples of certain ratios used in Economics

Ratio of national income to population Equation

Input-output Ratio Equation

Ratio of population to land areas Equation


Ratio of consumption to Income Equation


In economic rates like rate of economic growth, rate of growth of population, birth rate, death rate, agricultural rate are calculated.

For example: Rate of yield per hectare of a crop.

Rate of yield (in kg.) per hectare of crop Equation

Rates vs. Ratio

  • Rate and ratio calculation method are generally same.

  • Rate is the ratio between two magnitudes shown over a period of time.

  • Rate can be expressed besides per unit, per 100, 1000, lakh etc and even higher.

Need for arbitrary base in rate

  • Value of ratio per unit sometimes is so small.

  • Small base fails to convey importance of the rate or ratio.

  • Need to raise the base.

  • Arbitrary higher base for calculation of rate is chosen when:

  • Value of ratio is very small

  • Need to avoid fractions in comparisons


  • Percentage is type of rate or ratio with base 100.

  • Every ratio per unit when multiply by 100 is converted into percentage.

    Percentage Equation


Measures of central tendency

  • Clustering of items values in the central part of the distribution is known as central tendency.

  • Measure of central tendency means a value where the concentration of the items or values is found to be greatest.

  • Average also called measures of central tendency.

  • It is a value which is typical or representative of a set of data.

  • Average can be obtained by using 5 different measures of central tendency:

  • Average will help to compare its various sections according to their performance.

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