Necessity of Applied Statistics for Economic Planning, Business

EghtesadOnline: Talking about statistics, almost all economists promptly think of advanced econometric analysis and prediction of nonlinear relations in an uncertain atmosphere or recognition of important relationships between macroeconomic variables like exchange rate or interest rate.

News ID: ۷۸۱۹۰۳

25 February 2018

The importance of these methods and technical approaches is clear for all economists. But it is also significant to perceive that when it comes to action, a large segment of problems are not complicated and with the expanding use of simple statistical concepts, one can overcome a wide range of economic problems and perhaps this approach may be far more effective.

One of the gaps in the traditional business environment of the Iranian economy is lack of databases with information such as volume of transactions, average price of transactions and the volume of future orders in short-term ranges, i.e. one, two and six months, or intermediate periods of one and two years to provide an online showcase for economic agents.

Lack of these databases has caused numerous problems at the national and provincial levels in such a way that suppliers like manufacturers and traders do not have accurate information about the prospects of the orders in the long-, medium- or even short-term. This has made it impossible for them to be programmed and rendered their future vague and less predictable, according to Financial Tribune.

In such an atmosphere of unreliability, the behavior of producers and traders causes the economy to face a lot of unusual imbalances at the macro level. This means that when it is felt that a commodity in the market is scarce, merchants will import it and after a period, that commodity is found abundantly.

At the micro level, this traditional blind business mechanism has caused entrepreneurs, traders and manufacturers to face financial instability and volatile inventory that cyclically leads to a huge imbalance in the essential markets commodity.

However, if traders and manufacturers have enough information about the scale of future orders and requests, none of these problems will occur.

One of the negative consequences of a traditional business mechanism is the creation of potential corruption areas wherein many trading companies would lobby to avoid operational risk.

Certain specific and unexpected decisions of the owners of “golden signatures” are the outcomes of such an environment. If these databases become available, manufacturers, entrepreneurs and traders will be able to make plans and various businesses will become organized.

The suggestion to create such databases is not aimed at interfering in the market mechanism or attempting to establish a centralized economic planning system, but rather it is aimed at improving the level of transparency and symmetric information between market players on the actual situation of market variables to help them reduce their profit risk and schematize their own investment plans.

Consequently, after perceiving the signs of future market parameters, they will also be guided to reduce economic imbalances at the provincial and national level.

The establishment of such databases at the national and regional level helps surplus goods or products to quickly respond to extra demand in other parts of the country and thereby provides the country with self-sufficiency. It also helps prevent the waste of many products, especially agricultural ones with short shelf lives.

The attitudes of market players and many of the decision makers to the market are still traditional. As long as this attitude is not reformed, any scientific, technical and technological growth will not respond appropriately to market demand at the right time.

Demand is the determinant factor for the market and the growth of science and technology must be tailored to consumer preferences, otherwise it will cease to be effective. Thus, the emergence of a new market structure, based on the presentation of the periodic statistics of transactions, has priority over the growth of technology.