What is Statistics?

Statistics could be viewed as a collection of scientific techniques to gather data with a view to interpret or explain the processes of any system, leading to understanding and prediction of such processes within the system.

The system can be anything. It could be a dynamical system with an inherent built-in chaotic component (for example, weather), or a social multi-culatural system with complex cross-cultural interactions.

So it is easy to see why statistical techniques are widely used in various disciplines, such as, Weather and Climate prediction, Medicine, Business, Finance, Economics, and Social Sciences.

If you think carefully all statistical techniques are meant to either describe a system (population) based on observations (sample) or provide judgments about the present or future states of the system using observations. The former group of techniques is known as Descriptive Statistics and the latter class of techniques is called Inferential Statistics.

Descriptive Statistics is quite useful to describe a system so that one can better understand the processes in the system. Once we get a handle on the processes of the system, then we could use the Statistical Inference techniques to judge the present or future behaviour of that system.

One might also like to add one more area to the above well established groups: Uncertainty. Quantifying uncertainty in system processes has useful business and industrial applications. We shall cover more on this topic in the uncertainty measures page.