CHAPTER

2

Studying this chapter should enable
you to:
• understand the meaning and
purpose of data collection;
• distinguish between primary and
secondary sources;
• know the mode of collection of data;
• distinguish between Census and
Sample Surveys;
• be familiar with the techniques of
sampling;
• know about some important
sources of secondary data.

1. I N T R O D U C T I O N
In the previous chapter, you have read
about what is economics. You also
studied about the role and importance
of statistics in economics. In this

Collection of Data

chapter, you will study the sources of
data and the mode of data collection.
The purpose of collection of data is to
collect evidence for reaching a sound
and clear solution to a problem.
In economics, you often come
across a statement like,
“After many fluctuations the output
of food grains rose to 176 million tonnes
in 1990–91 and 199 million tonnes in
1996–97, but fell to 194 million tonnes
in 1997–98. Production of food grains
then rose continuously and touched
212 million tonnes in 2001–02.”
In this statement, you can observe
that the food grains production in
different years does not remain the
same. It varies from year to year and
from crop to crop. As these values

1 0

STATISTICS FOR ECONOMICS

vary, they are called variable. The
variables are generally represented by
the letters X, Y or Z. The values of
these variables are the observation.
For example, suppose the food grain
production in India varies between
100 million tonnes in 1970–71 to 220
million tonnes in 2001–02 as shown
in the following table. The years are
represented by variable X and the
production of food grain in India (in
million tonnes) is represented by
variable Y:
TABLE 2.1
Production of Food Grain in India
(Million Tonnes)
X

Y

1970–71
1978–79
1979–80
1990–91
1996–97
1997–98
2001–02

108
132
108
176
199
194
212

Here, these values of the variables
X and Y are the ‘data’, from which we
can obtain information about the
trend of the production of food grains
in India. To know the fluctuations in
the output of food grains, we need the
‘data’ on the production of food grains
in India. ‘Data’ is a tool, which helps
in understanding problems by
providing information.
You must be wondering where do
‘data’ come from and how do we collect
these? In the following sections we will
discuss the types of data, method and
instruments of data collection and
sources of obtaining data.

2. WHAT

ARE

THE

SOURCES

OF

DATA?

Statistical data can be obtained from
two sources. The enumerator (person
who collects the data) may collect the
data by conducting an enquiry or an
investigation. Such data are called
Primary Data, as they are based on
first hand information. Suppose, you
want to know about the popularity of
a film star among school students. For
this, you will have to enquire from a
large number of school students, by
asking questions from them to collect
the desired information. The data you
get, is an example of primary data.
If the data have been collected and
processed (scrutinised and tabulated)
by some other agency, they are called
Secondary Data. Generally, the
published data are secondary data.
They can be obtained either from
published sources or from any other
source, for example, a web site. Thus,
the data are primary to the source that
collects and processes them for the
first time and secondary for all sources
that later use such data. Use of
secondary data saves time and cost.
For example, after collecting the data
on the popularity of the film star
among students, you publish a report.
If somebody uses the data collected
by you for a similar study, it becomes
secondary data.

3. HOW

DO

WE

COLLECT

THE

DATA?

Do you know how a manufacturer
decides about a product or how a
political party decides about a
candidate? They conduct a survey by

COLLECTION OF DATA

asking questions about a particular
product or candidate from a large
group of people. The purpose of
surveys is to describe some
characteristics like price, quality,
usefulness (in case of the product) and
popularity, honesty, loyalty (in case
of the candidate). The purpose of the
survey is to collect data. Survey is a
method of gathering information from
individuals.
Preparation of Instrument
The most common type of instrument
used in surveys is questionnaire/
interview schedule. The questionnaire
is either self administered by the
respondent or administered by the
researcher (enumerator) or trained
investigator. While preparing the
questionnaire/interview schedule, you
should keep in mind the following
points;

•

•

The questionnaire should not be too
long. The number of questions
should be as minimum as possible.
Long questionnaires discourage
people from completing them.

The series of questions should move
from general to specific. The
questionnaire should start from
general questions and proceed to
more specific ones. This helps the
respondents feel comfortable. For
example:
Poor Q
(i) Is increase in electricity charges
justified?
(ii) Is the electricity supply in your
locality regular?

1 1

Good Q
(i) Is the electricity supply in your
locality regular?
(ii) Is increase in electricity charges
justified?

•

The questions should be precise
and clear. For example,
Poor Q
What percentage of your income do
you spend on clothing in order to look
presentable?
Good Q
What percentage of your income do
you spend on clothing?

•

The questions should not be
ambiguous, to enable the respondents to answer quickly, correctly
and clearly. For example:
Poor Q
Do you spend a lot of money on books
in a month?
Good Q
How much do you spend on books in
a month?
(i) Less than Rs 200
(ii) Between Rs 200–300
(iii) Between Rs 300–400
(iv) More than Rs 400

•

The question should not use double
negatives. The questions starting
with “Wouldn’t you” or “Don’t you”
should be avoided, as they may
lead to biased responses. For
example:
Poor Q
Don’t you think smoking should be
prohibited?
Good Q
Do you think smoking should be
prohibited?

1 2

•

The question should not be a
leading question, which gives a clue
about how the respondent should
answer. For example:
Poor Q
How do you like the flavour of this
high-quality tea?
Good Q
How do you like the flavour of this tea?

•

The question should not indicate
alternatives to the answer. For
example:
Poor Q
Would you like to do a job after college
or be a housewife?
Good Q
Would you like to do a job, if possible?
The questionnaire may consist of
closed ended (or structured) questions
or open ended (or unstructured)
questions.
Closed ended or structured
questions can either be a two-way
question or a multiple choice question.
When there are only two possible
answers, ‘yes’ or ‘no’, it is called a twoway question.
When there is a possibility of more
than two options of answers, multiple
choice questions are more appropriate.
Example,
Q. Why did you sell your land?
(i) To pay off the debts.
(ii) To finance children’s education.
(iii) To invest in another property.
(iv) Any other (please specify).
Closed -ended questions are easy
to use, score and code for analysis,

STATISTICS FOR ECONOMICS

because all the respondents respond
from the given options. But they are
difficult to write as the alternatives
should be clearly written to represent
both sides of the issue. There is also
a possibility that the individual’s true
response is not present among the
options given. For this, the choice of
‘Any Other’ is provided, where the
respondent can write a response,
which was not anticipated by the
researcher. Moreover, another
limitation of multiple-choice questions
is that they tend to restrict the
answers by providing alternatives,
without which the respondents may
have answered differently.
Open-ended questions allow for
more individualised responses, but
they are difficult to interpret and hard
to score, since there are a lot of
variations in the responses. Example,
Q. What is your view about
globalisation?
Mode of Data Collection
Have you ever come across a television
show in which reporters ask questions
from children, housewives or general
public regarding their examination
performance or a brand of soap or a
political party? The purpose of asking
questions is to do a survey for
collection of data. There are three
basic ways of collecting data: (i)
Personal Interviews, (ii) Mailing
(questionnaire) Surveys, and (iii)
Telephone Interviews.

COLLECTION OF DATA

Personal Interviews
This method is used
when the researcher
has access to all the
members. The researcher (or investigator)
conducts face to face interviews with
the respondents.
Personal interviews are preferred
due to various reasons. Personal
contact is made between the
respondent and the interviewer. The
interviewer has the opportunity of
explaining the study and answering
any query of the respondents. The
interviewer can request the respondent to expand on answers that are
particularly important. Misinterpretation and misunderstanding can be
avoided. Watching the reactions of the
respondents can provide supplementary information.
Personal interview has some
demerits too. It is expensive, as it
requires trained interviewers. It takes
longer time to complete the survey.
Presence of the researcher may inhibit
respondents from saying what they
really think.
Mailing Questionnaire
When the data in a survey are
collected by mail, the questionnaire is
sent to each individual
by mail with a request
to complete and return
it by a given date. The
advantages of this
method are that, it is

1 3

less expensive. It allows the researcher
to have access to people in remote
areas too, who might be difficult to
reach in person or by telephone. It
does not allow influencing of the
respondents by the interviewer. It also
permits the respondents to take
sufficient time to give thoughtful
answers to the questions. These days
online surveys or surveys through
short messaging service i.e. SMS have
become popular. Do you know how an
online survey is conducted?
The disadvantages of mail survey
are that, there is less opportunity to
provide assistance in clarifying
instructions, so there is a possibility
of misinterpretation of questions.
Mailing is also likely to produce low
response rates due to certain factors
such as returning the questionnaire
without completing it, not returning
the questionnaire at all, loss of
questionnaire in the mail itself, etc.
Telephone Interviews
In a telephone interview, the
investigator asks questions over the
telephone. The advantages of telephone
interviews are that they
are cheaper than
personal interviews and
can be conducted in a shorter time.
They allow the researcher to assist the
respondent by clarifying the
questions. Telephone interview is
better in the cases where the
respondents are reluctant to answer
certain questions in personal
interviews.

1 4

STATISTICS FOR ECONOMICS

Activities
•

•

You have to collect information
from a person, who lives in a
remote village of India. Which
mode of data collection will be
the most appropriate for
collecting information from him?
You have to interview the parents
about the quality of teaching in
a school. If the principal of the
school is present there, what
types of problems can arise?

The disadvantage of this method
is access to people, as many people
may not own telephones. Telephone
Interviews also obstruct visual
reactions of the respondents, which
becomes helpful in obtaining
information on sensitive issues.
Pilot Survey
Once the questionnaire is ready, it is
advisable to conduct a try-out with a

small group which is known as Pilot
Survey or Pre-Testing of the
questionnaire. The pilot survey helps
in providing a preliminary idea about
the survey. It helps in pre-testing of
the questionnaire, so as to know the
shortcomings and drawbacks of the
questions. Pilot survey also helps in
assessing the suitability of questions,
clarity of instructions, performance of
enumerators and the cost and time
involved in the actual survey.

4. CENSUS

AND

SAMPLE SURVEYS

Census or Complete Enumeration
A survey, which includes every
element of the population, is known
as Census or the Method of Complete
Enumeration. If certain agencies are
interested in studying the total
population in India, they have to
obtain information from all the
households in rural and urban India.

Advantages

Disadvantages

• Highest Response Rate
• Allows use of all types of questions
• Better for using open-ended
questions
• Allows clarification of ambiguous
questions.

• Most expensive
• Possibility of influencing
respondents
• More time taking.

•
•
•
•
•

Least expensive
Only method to reach remote areas
No influence on respondents
Maintains anonymity of respondents
Best for sensitive questions.

• Cannot be used by illiterates
• Long response time
• Does not allow explanation of
unambiguous questions
• Reactions cannot be watched.

• Relatively low cost
• Relatively less influence on
respondents
• Relatively high response rate.

• Limited use
• Reactions cannot be watched
• Possibility of influencing respondents.

COLLECTION OF DATA

The essential feature of this method
is that this covers every individual unit
in the entire population. You cannot
select some and leave out others. You
may be familiar with the Census of
India, which is carried out every ten
years. A house-to-house enquiry is
carried out, covering all households
in India. Demographic data on birth
and death rates, literacy, workforce,
life expectancy, size and composition
of population, etc. are collected and
published by the Registrar General of
India. The last Census of India was
held in February 2001.

1 5

Source: Census of India, 2001.

1981 indicated that the rate of
population growth during 1960s and
1970s remained almost same. 1991
Census indicated that the annual
growth rate of population during
1980s was 2.14 per cent, which came
down to 1.93 per cent during 1990s
according to Census 2001.
“At 00.00 hours of first March,
2001 the population of India stood
at 1027,015,247 comprising of
531,277,078
males
and
495,738,169 females. Thus, India
becomes the second country in the
world after China to cross the one
billion mark.”
Source: Census of India, 2001.

Sample Survey

According to the Census 2001,
population of India is 102.70 crore. It
was 23.83 crore according to Census
1901. In a period of hundred years,
the population of our country
increased by 78.87 crore. Census

Population or the Universe in statistics
means totality of the items under
study. Thus, the Population or the
Universe is a group to which the
results of the study are intended to
apply. A population is always all the
individuals/items who possess certain
characteristics (or a set of characteris-

1 6

tics), according to the purpose of the
survey. The first task in selecting a
sample is to identify the population.
Once the population is identified, the
researcher selects a Representative
Sample, as it is difficult to study the
entire population. A sample refers to
a group or section of the population
from which information is to be
obtained. A good sample (representative sample) is generally smaller than
the population and is capable of
providing reasonably accurate
information about the population at
a much lower cost and shorter time.
Suppose you want to study the
average income of people in a certain
region. According to the Census
method, you would be required to find
out the income of every individual in
the region, add them up and divide
by number of individuals to get the
average income of people in the region.
This method would require huge
expenditure, as a large number of
enumerators have to be employed.
Alternatively, you select a representative sample, of a few individuals, from
the region and find out their income.
The average income of the selected
group of individuals is used as an
estimate of average income of the
individuals of the entire region.
Example
• Research problem: To study the
economic condition of agricultural
labourers in Churachandpur district
of Manipur.
• Population: All agricultural
labourers in Churachandpur district.

STATISTICS FOR ECONOMICS

• Sample: Ten per cent of the
agricultural labourers in Churachandpur district.
Most of the surveys are sample
surveys. These are preferred in
statistics because of a number of
reasons. A sample can provide
reasonably reliable and accurate
information at a lower cost and
shorter time. As samples are smaller
than population, more detailed
information can be collected by
conducting intensive enquiries. As we
need a smaller team of enumerators,
it is easier to train them and supervise
their work more effectively.
Now the question is how do you
do the sampling? There are two main
types of sampling, random and nonrandom. The following description will
make their distinction clear.
Activities
•
•

•

In which years will the next
Census be held in India and
China?
If you have to study the opinion
of students about the new
economics textbook of class XI,
what will be your population and
sample?
If a researcher wants to estimate
the average yield of wheat in
Punjab, what will be her/his
population and sample?

Random Sampling
As the name suggests, random
sampling is one where the individual
units from the population (samples)
are selected at random. The
government wants to determine the

COLLECTION OF DATA

1 7

A Population of 20
Kuchha and 20
Pucca Houses

A Representative
Sample

A non Representative
Sample

impact of the rise in petrol price on
the household budget of a particular
locality. For this, a representative
(random) sample of 30 households has
to be taken and studied. The names
of all the 300 households of that area
are written on pieces of paper and
mixed well, then 30 names to be
interviewed are selected one by one.
In the random sampling, every
individual has an equal chance of being
selected and the individuals who are
selected are just like the ones who are
not selected. In the above example, all
the 300 sampling units (also called
sampling frame) of the population got
an equal chance of being included in
the sample of 30 units and hence the
sample, such drawn, is a random
sample. This is also called lottery
method. The same could be done using
a Random Number Table also.
How to use the Random Number
Tables?
Do you know what are the Random
Number Tables? Random number

tables have been generated to
guarantee equal probability of
selection of every individual unit (by
their listed serial number in the
sampling frame) in the population.
They are available either in a
published form or can be generated
by using appropriate software
packages (See Appendix B).You can
start using the table from anywhere,
i.e., from any page, column, row or
point. In the above example, you need
to select a sample of 30 households
out of 300 total households. Here, the
largest serial number is 300, a three
digit number and therefore we consult
three digit random numbers in
sequence. We will skip the random
numbers greater than 300 since there
is no household number greater than
300. Thus, the 30 selected households
are with serial numbers: 149, 219,
111, 165, 230, 007, 089, 212, 051,
244, 300, 051, 244, 155, 300, 051,
152, 156, 205, 070, 015, 157, 040,
243, 479, 116, 122, 081, 160, 162.

Exit Polls
You must have seen that when an
election takes place, the television
networks provide election coverage.
They also try to predict the results.
This is done through exit polls,
wherein a random sample of voters
who exit the polling booths are asked
whom they voted for. From the data
of the sample of voters, the
prediction is made.

1 8

STATISTICS FOR ECONOMICS

Activity
•

You have to analyse the trend of
foodgrains production in India
for the last fifty years. As it is
difficult to include all the years,
you have to select a sample of
production of ten years. Using
the Random Number Tables,
how will you select your sample?

Non-Random Sampling
There may be a situation that you
have to select 10 out of 100
households in a locality. You have to
decide which household to select and
which to reject. You may select the
households conveniently situated or
the households known to you or your
friend. In this case, you are using your
judgement (bias) in selecting 10
households. This way of selecting 10
out of 100 households is not a random
selection. In a non-random sampling
method all the units of the population
do not have an equal chance of being
selected and convenience or judgement
of the investigator plays an important
role in selection of the sample. They are
mainly selected on the basis of
judgment, purpose, convenience or
quota and are non-random samples.

5. SAMPLING
ERRORS

AND

NON-S AMPLING

Sampling Errors
The purpose of the sample is to take
an estimate of the population.
Sampling error refers to the
differences between the sample
estimate and the actual value of a

characteristic of the population (that
may be the average income, etc.). It is
the error that occurs when you make
an observation from the sample taken
from the population. Thus, the
difference between the actual value of
a parameter of the population (which
is not known) and its estimate (from
the sample) is the sampling error. It is
possible to reduce the magnitude of
sampling error by taking a larger
sample.
Example
Consider a case of incomes of 5
farmers of Manipur. The variable x
(income of farmers) has measurements 500, 550, 600, 650, 700. We
note that the population average of
(500+550+600+650+700)
÷ 5 = 3000 ÷ 5 = 600.
Now, suppose we select a sample
of two individuals where x has
measurements of 500 and 600. The
sample average is (500 + 600) ÷ 2
= 1100 ÷ 2 = 550.
Here, the sampling error of the
estimate = 600 (true value) – 550
(estimate) = 50.
Non-Sampling Errors
Non-sampling errors are more serious
than sampling errors because a
sampling error can be minimised by
taking a larger sample. It is difficult
to minimise non-sampling error, even
by taking a large sample. Even a
Census can contain non-sampling
errors. Some of the non-sampling
errors are:

COLLECTION OF DATA

1 9

Errors in Data Acquisition
This type of error arises from recording
of incorrect responses. Suppose, the
teacher asks the students to measure
the length of the teacher’s table in the
classroom. The measurement by the
students may differ. The differences
may occur due to differences in
measuring tape, carelessness of the
students etc. Similarly, suppose we
want to collect data on prices of
oranges. We know that prices vary
from shop to shop and from market
to market. Prices also vary according
to the quality. Therefore, we can only
consider the average prices. Recording
mistakes can also take place as the
enumerators or the respondents may
commit errors in recording or transscripting the data, for example, he/
she may record 13 instead of 31.
Non-Response Errors
Non-response occurs if an interviewer
is unable to contact a person listed in
the sample or a person from the
sample refuses to respond. In this
case, the sample observation may not
be representative.
Sampling Bias
Sampling bias occurs when the
sampling plan is such that some
members of the target population
could not possibly be included in the
sample.

6. CENSUS

OF

INDIA

AND

NSSO

There are some agencies both at the
national and state level, which collect,

process and tabulate the statistical
data. Some of the major agencies at
the national level are Census of India,
National Sample Survey Organisation
(NSSO), Central Statistical Organisation (CSO), Registrar General of India
(RGI), Directorate General of
Commercial Intelligence and Statistics
(DGCIS), Labour Bureau etc.
The Census of India provides the
most complete and continuous
demographic record of population. The
Census is being regularly conducted
every ten years since 1881. The first
Census after Independence was held
in 1951. The Census collects
information on various aspects of
population such as the size, density,
sex ratio, literacy, migration, ruralurban distribution etc. Census in
India is not merely a statistical
operation, the data is interpreted and
analysed in an interesting manner.
The NSSO was established by the
government of India to conduct
nation-wide surveys on socioeconomic issues. The NSSO does
continuous surveys in successive
rounds. The data collected by NSSO
surveys, on different socio economic
subjects, are released through reports
and its quarterly journal
Sarvekshana. NSSO provides periodic
estimates of literacy, school
enrolment, utilisation of educational
services, employment, unemployment,
manufacturing and service sector
enterprises, morbidity, maternity,
child care, utilisation of the public
distribution system etc. The NSS 59th
round survey (January–December

2 0

STATISTICS FOR ECONOMICS

2003) was on land and livestock
holdings, debt and investment. The
NSS 60th round survey (January–
June 2004) was on morbidity and
health care. The NSSO also
undertakes the fieldwork of Annual
survey of industries, conducts crop
estimation surveys, collects rural and
urban retail prices for compilation of
consumer price index numbers.

7. CONCLUSION
Economic facts, expressed in terms of
numbers, are called data. The purpose

of data collection is to understand,
explain and analyse a problem and
causes behind it. Primary data is
obtained by conducting a survey.
Survey includes various steps, which
need to be planned carefully. There are
various agencies which collect,
process, tabulate and publish
statistical data. These can be used as
secondary data. However, the choice
of source of data and mode of data
collection depends on the objective of
the study.

Recap
•
•
•
•
•
•
•
•
•

Data is a tool which helps in reaching a sound conclusion on any
problem by providing information.
Primary data is based on first hand information.
Survey can be done by personal interviews, mailing questionnaires
and telephone interviews.
Census covers every individual/unit belonging to the population.
Sample is a smaller group selected from the population from which
the relevant information would be sought.
In a random sampling, every individual is given an equal chance of
being selected for providing information.
Sampling error arises due to the difference between the actual
population and the estimate.
Non-sampling errors can arise in data acquisition, by non-response
or by bias in selection.
Census of India and National Sample Survey Organisation
are two important agencies at the national level, which collect,
process and tabulate data.

EXERCISES
1. Frame at least four appropriate multiple-choice options for following
questions:
(i) Which of the following is the most important when you buy a new
dress?

COLLECTION OF DATA

(ii)
(iii)
(iv)
(v)

How often do you use computers?
Which of the newspapers do you read regularly?
Rise in the price of petrol is justified.
What is the monthly income of your family?

2. Frame five two-way questions (with ‘Yes’ or ‘No’).
3. (i) There are many sources of data (true/false).
(ii) Telephone survey is the most suitable method of collecting data, when
the population is literate and spread over a large area (true/false).
(iii) Data collected by investigator is called the secondary data (true/false).
(iv) There is a certain bias involved in the non-random selection of samples
(true/false).
(v) Non-sampling errors can be minimised by taking large samples (true/
false).
4. What do you think about the following questions. Do you find any problem
with these questions? If yes, how?
(i) How far do you live from the closest market?
(ii) If plastic bags are only 5 percent of our garbage, should it be banned?
(iii) Wouldn’t you be opposed to increase in price of petrol?
(iv) (a) Do you agree with the use of chemical fertilizers?
(b) Do you use fertilizers in your fields?
(c) What is the yield per hectare in your field?
5. You want to research on the popularity of Vegetable Atta Noodles among
children. Design a suitable questionnaire for collecting this information.
6. In a village of 200 farms, a study was conducted to find the cropping
pattern. Out of the 50 farms surveyed, 50% grew only wheat. Identify the
population and the sample here.
7. Give two examples each of sample, population and variable.
8. Which of the following methods give better results and why?
(a) Census
(b) Sample
9. Which of the following errors is more serious and why?
(a) Sampling error (b) Non-Sampling error
10. Suppose there are 10 students in your class. You want to select three out
of them. How many samples are possible?
11. Discuss how you would use the lottery method to select 3 students out of
10 in your class?
12. Does the lottery method always give you a random sample? Explain.
13. Explain the procedure of selecting a random sample of 3 students out of
10 in your class, by using random number tables.
14. Do samples provide better results than surveys? Give reasons for your
answer.

2 1