Chapter 2 collection of data

Chapter - 2
Collection of
Data

Introduction
● Statistics has gained significant place in the
modern complex business world.
● Data is the base on which the superstructure
of statistical investigation is made.
● The success and failure of investigation mainly
depends upon the quality, adequacy and
accuracy of data.
● The purpose of collection of data is to show
evidence for reaching a sound and clear
solution to an economic problem.
● Data are tools, which help in understanding
economic problems by providing information.

● The word ‘enquiry’ means a search of knowledge.
● Statistical enquiry means a search conducted
by using statistical methods.
● It implies conducting investigation with the
help of statistical methods.
● The person who conducts this investigation is
called an investigator.
● The investigator needs the help of enumerators
(who collect the information) and respondents
(who provide the information) for statistical
enquiry.
● Survey is a method of collecting information
from the respondent.

(A) Internal Sources of Data
(i) Different organisations and Government
departments generate the data as their
regular function which is the internal
information.
(ii) Internal data may be available in the
organisation about sales, production, interest,
profit, dividends etc.
(iii) Such data are compiled and used for
future Planning.
(iv) These data are mostly of secondary nature.
Sources of Data

(B) External Sources of Data
(i) These are the sources which are external
to the organisation.
(ii) Information collected from outside (other)
organisations and institutions is called
external data.
(iii) External data can be obtained from
primary source or secondary source.
(iv) Data produced by external agencies and
which relates to the country as a whole rather
than one organisation or unit is external in
nature.

Chapter 2 collection of data

Primary & Secondary Source
of Data
(A) Primary Source of Data
● When the investigator decides to collect
the basic data himself through statistical survey
with the help of his team or field workers, he
relies on primary source of data.
● Primary source of data implies collection of
data from its source of origin.
● It offers first hand quantitative information
relating to statistical study.
● It involves lot of time and cost.

(B) Secondary Source of Data
● Secondary Source of collection of data
implies obtaining the relevant statistical
information from an agency, or an
institution which is already in possession of
that information.
● The investigator is not getting first hand
information relating to his statistical
study.
● He relies on the information that already
exists.

Meaning of Primary and
Secondary Data
Primary source of collecting data offers you,
‘Primary data’ and secondary source offers you
‘Secondary data'.
(a) Primary Data - Data collected by the
investigator for his own purpose, for the first
time, from beginning to end, are called primary
data.
● These are collected from the primary source
of origin.
● Primary data are original.
● These are based on first hand information.

(b) Secondary Data - Secondary data are
those which are already in existence, and which
have been collected, for some other purpose
than the answering of the question in hand.
● These can be obtained either from published
sources such as government reports,
documents, newspapers, books written by
economists etc or unpublished sources.
● Use of secondary data saves time and cost.
Note: If you are getting data from somebody
else who collected it from its source of origin
but did not use it for his own study, it will be
deemed as primary data.

Difference between Primary Data &
Secondary Data
Basis Primary Data Secondary Data
Meaning
Source
Original
Cost
Adjustm
ents
Name
Data collected by the
investigator for his own
purpose, for the first time,
from beginning to end, are
called Primary Data.
These are collected from
primary source.
These are original data.
These are costlier in terms
of time, money & efforts
involved.
Need not to be adjusted as
these are collected for some
specific purpose.
First hand data.
Data which are already in
existence, and which have been
collected for some other
purpose than answering the
question in hand are called
Secondary Data.
These are collected from
secondary source.
These are not original data.
These are less costlier in terms
of time, money & efforts
involved.
Needs to be adjusted as it is
already collected for some
other purpose.
Second hand data.

How Basic Data is Collected: Some
Statistical Methods/ Modes of Data
Collection

Methods of Collecting Primary
Data
(I) Direct Personal Investigation
● The direct personal investigation is the
method by which data are personally collected
by the investigator from the informants.
● In other words, the investigator establishes
direct relation with the persons from whom
the information is to be obtained.
● Success of this method depends on efficiency,
impartiality and tolerance of the investigator.

(a) Suitability
(1) Area of enquiry is limited.
(2) Maximum degree of accuracy is needed.
(3) Direct contact with informants is necessary.
(4) Secrecy of information is significant.
(5) Data are required to be original.
(b) Merits
(1) Originality: It provides first hand
information, so original data are collected.
(2) Accuracy: Data are fairly accurate as
information is collected from the source of origin.

(3) Reliability: Since information is personally
collected by the investigator and the enquiry is
intensive, data collected are reliable.
(4) Related Data: When in direct contact with
the informants, the investigator may obtain other
related information as well.
(5) Uniformity: It facilitates comparison.
(6) Elastic: This method is fairly elastic because
the investigator can always make necessary
adjustments in his set of questions and language
of communication according to educational
standards and ability of the informants.

(c) Demerits
(1) Difficult to Cover Wide Areas: Direct
personal investigation becomes very difficult when
the area of the study is very wide.
(2) Personal Bias: This method is highly prone to
personal bias of the investigator. As a result, the
data may lose their credibility.
(3) Costly: This method is very expensive in
terms of the time, money and efforts involved.
(4) Complex: This method is lengthy and complex
as it requires investigators to be trained in
conducting personal interviews with informants.

II. Indirect Oral Investigation
● When the respondents are reluctant to
furnish the required information or field is
large, we use indirect oral investigation.
● In this method, the investigator collects the
data from the persons who are indirectly
concerned with the subject matter of the
enquiry.
● Data are collected from the third party or
witness who is not directly related to the
problem.
● This method is used by committees and
commissions appointed by government.

● The accuracy of the data collected under this
method largely depends on the type of persons
selected for interrogations.
● For reliability, the following precautions should
be observed.
(i) No. of witnesses should be fairly large.
(ii) Witnesses should be ready to provide
information fairly & accurately.
(iii) The informant should be mentally sound.
(iv) Investigator should be polite & unbiased.
(v) Information given by the witnesses should be
cross-checked to ascertain the accuracy.
(vi) Witnesses should not be biased in any way.

(a) Suitability
This method is suitable when:
(1) When the area of investigation is very wide.
(2) It is not possible to have direct contact
with the concerned informants or respondents.
(3) When due to lack of knowledge, the
person concerned is not in a position to provide
information.
(4) When the data are complex in nature.
(5) When the concerned person who is directly
concerned does not show his interest to provide
any information.

(b) Merits
(1) Wide Coverage: This method can be applied
even when the field of investigation is very wide.
(2) Less Expensive: Since it saves labour, time
and money, it is less expensive than Direct
Personal Investigation.
(3) Expert Opinion: Using this method an
investigator can seek opinion of the experts and
thereby can make his information more reliable.
(4) Simple: This is relatively a simple approach of
data collection.

(c) Demerits
(1) Less Accurate: The data collected by this
method are relatively less accurate. This is
because the information is obtained from
persons other than the concerned informants.
(2) Biased: There is possibility of personal bias
of the witnesses giving information.
(3) Doubtful Conclusions: This method may lead
to doubtful conclusions due to carelessness of
the witnesses.

Difference between Direct Personal and
Indirect Oral Investigation
Basis Direct Personal
Investigation
Indirect Oral
Investigation
1. Meaning
2. Area
3. Original
4. Cost
5.Reliabili-
ty
It is the method by which
data are personally
collected by the
investigator from the
informants.
Suitable for
smaller/limited areas.
Original in nature.
It is costly in terms of
time, money and efforts
involved.
This method is more
reliable as information is
collected directly from
the informants.
It is the method by which
information is obtained
not from the persons
regarding whom the
information is needed.
Suitable for wider/ larger
areas.
It lacks originality.
It is less costlier in terms
of time, money and
efforts involved.
This method is less
reliable as information is
collected from the
witnesses.

III. Information from Local
Sources or Correspondents
● Under this method, the investigator appoints
local persons or correspondents at different
places to be investigated. They collect
information in their own way and furnish the
same to the investigator.
● These correspondents are trained to collect
the information from the respondents.
● Radios and newspaper agencies generally
obtain information about strikes, thefts etc.
by this method.
● There is no formal collection of data.

(a) Suitability
This method is suitable particularly when:
(1) Regular and continuous information is needed.
(2) The area of investigation is large.
(3) The information is to be used by journals,
magazines, radio, TV, etc.
(4) A very high degree of accuracy of is not required.
(b) Merits
(1) Economical: This method is quite economical
in terms of time, money or efforts involved.
(2) Wide Coverage: This method allows a fairly
wide coverage of investigation.

(3) Continuity: The correspondents keep on
supplying almost - regular information, so
continuity remains maintained.
(4) Suitable for Special Purpose: This method is
particularly suitable for some special-purpose
investigations, e.g., price quotations from the
different grain markets for the construction of
Index Number of agricultural prices.
(c) Demerits
(1) No Originality: Originality of data is sacrificed
owing to the lack of personal contact with the
respondents.

(2) Lack of Uniformity: Information is collected by
different correspondents & they use different
methods of collecting data. The data collected are
not homogenous and uniform.
(3) Biased: The data collected from correspondents
may suffer from personal biasness and may not be
reliable.
(4) Lack of Accuracy: Since this method gives
rough and approximate results, the data collected
are not very accurate.
(5) Time Consuming: There may be a delay in the
collection of data by this method if it involves a lot
of time to collect data by the correspondents.

IV. Information through
Questionnaires and Schedules
● Under this method, the investigator prepares
a questionnaire keeping in view the objective
of the enquiry.
● A questionnaire consists of a list of
questions pertaining to the investigation.
● There are two ways of collecting information
on the basis of questionnaire:
(a) Mailing Method
(b) Enumerator’s Method.

(i) Mailing Method
● Under this method, a questionnaire prepared
according to the objective of study is mailed to
the informants, with the request to answer and
return them within a specified time period.
● A letter is attached with the questionnaire
giving the purpose of enquiry.
● It is also assured that the information would be
kept secret.
● Such questionnaires generally have a prepaid
stamp affixed to it.
● The informant notes the answers against the
questions and returns the completed questionnaire
to the investigator.

(a) Suitability
This method is most suited when:
(1) The area of the study is very wide.
(2) The informants are educated and literate.
(3) When original first hand data are required.
(4) When it is compulsory by law to fill
questionnaire.
(b) Merits
(1) Economical: This method is economical in
terms of time, money and efforts involved as
mailing cost is less than that of personal visits.

(2) Original: This method is original and,
therefore, fairly reliable. This is because the
information is duly supplied by the concerned
persons themselves.
(3) Wide Coverage: This method allows wide
coverage of the area of study. This method is
convenient when informants are spread over a
vast geographical area to be investigated.
(c) Demerits
(1) Lack of Interest: Generally, the informants
do not take interest in questionnaires and fail to
return the questionnaires. Those who return,
often send incomplete answers.

(2) Lack of Flexibility: This method lacks
flexibility. When questions are not properly
replied, these cannot be changed to obtain the
required information.
(3) Limited Use: This method has limited use
owing to the fact that the questionnaires can be
answered only by the educated informants.
(4) Biased: If the informants are biased, then
the information will also be biased.
(5) Less Accuracy: This is because some
questions may be difficult, and consequently
accurate answers may not be offered.

(ii) Enumerator’s Method
● The enumerator himself approaches the
informant with the questionnaire.
● The questionnaires which are filled by the
enumerators themselves by putting questions are
called schedules.
● Thus, under this method, the enumerator
himself fills the schedules after seeking
information from the informants.
● Enumerators are those persons who help the
investigators in collecting the data.
● The enumerators are given training to fill the
schedules and put the questions intelligently to
obtain accurate information.

(a) Suitability
This method is mostly used when:
(1) Field of investigation is large.
(2) The investigation needs specialised and skilled
investigators.
(3) The informants are not educated enough.
(4) Personal contact is necessary when true and
reliable answers are required for difficult
questions.
(b) Merits
(1) Wide Coverage: This method covers wide area.
Even illiterates can furnish the required
information.

(2) Accuracy: There is a fair degree of
accuracy in the results. This is because
investigations are done by specialised
enumerators.
(3) Personal Contact: Unlike in the case of
mailing questionnaires, there is personal
contact with the informants in this method.
Accordingly, accurate and right answers are
obtained.
(4) Completeness: Schedules have the merit
of completeness because these are filled in by
the enumerators themselves.

(c) Demerits
(1) Expensive: It is expensive method because of
the involvement of trained investigators.
(2) Availability of Enumerators: Competent
enumerators may not be available. Accuracy of the
information accordingly suffers.
(3) Time Consuming: Enumerators may need
specialised training for particular investigation.
This becomes time consuming.
(4) Partial: If the enumerators are biased, then the
data will not be accurate.
(5) Unsuitable for Small Investigations: Since this
method involves a lot of cost, it is unsuitable for small
private investigations.

Note - The set of questions in questionnaires
and schedules are similar.
● The only difference that lies between the two
is that, in questionnaires, the entire information
is recorded by the informants themselves.
● In the schedules, on the other hand, the
information as supplied by the informants is
recorded by the enumerators.

Qualities of a Good Questionnaire
1.Number of questions- The number of questions
asked should be limited. Questionnaire with many
questions discourages people to complete it.
2.Simple and clear- The questions asked should
be simple, clear and short. The answers to these
questions should be precise.
3.Proper arrangement of questions- The
questions should be logically arranged. In other
words, proper order should be followed.

4.No personal questions- The questions which
are too personal in nature, which offend the
feelings of the informants, should be avoided.
Similarly, questions which may hurt their
religious feelings, emotions or sentiments, should
be avoided.
5.No mathematical calculations- The questions
whose interpretation requires mathematical
computations should not be asked.
6.Cross examination- In order to verify any
particular information, questions may be set in
such a way that the verification may be possible.

7.Instructions-The questionnaire should carry
proper instructions defining the way the
answers are to be given. All the terms should be
clearly defined. The address, date and time of
submitting the questionnaire should be clearly
mentioned.
8. Pre-testing of the questionnaire- Pre-test
of the questionnaire on some respondents will
give an idea to the investigator about the
effectiveness of the questionnaire. The
investigator may modify, alter or redesign it on
the basis of feedback.

Methods of Collection of Secondary Data
(A) Published Sources
1. Government Publications - Government
organisations and departments publish current
information along with statistical facts on different
topics. It is a reliable source of information.
Examples -Annual Survey of industries, Agriculture
Statistics of India, Reserve Bank of India Bulletin
etc.

2. Semi-Government publications- Municipalities
and Metropolitan Councils publish information
regarding health, birth, death, education, sanitation
etc. This source of data is reliable in nature and is
fairly used.
3. Reports of committees and commissions-
Various committees and commissions are appointed
by central and state governments for case studies
and suggestions. Some of the reports are Report of
the Tariff Commissions, Patel Committee Report,
Report of the Planning Commission etc.
4. Annual reports of joint stock companies-These
are useful for procuring statistical data. These are
published by companies annually.

5. Publications of international organisations-
International statistics from official publications
of different international organisations like UNO,
ILO, IMF, World Bank etc. are a source of published
secondary data.
6. Publications of research institutions - There
are a large number of organisations doing research
on various subjects. Foundation of Scientific and
Economic Research and the National Council of
Applied Economic Research are examples of such
institutions.
7. Journals and newspapers- Journals (e.g. Journal
of Industry and Trade) and newspapers (e.g.,
Economic Times) regularly collect and furnish data
on various topics.

8. Publications of trade institutions- Now-a
days, trade institutions have their research and
statistical divisions which collect and publish
data, For example, Federation of Indian
Chamber of Commerce, Institute of Chartered
Accountants, etc.

(B) Unpublished Sources
● There are some unpublished secondary data as
well.
● These data are collected by the government
organisations and others, generally for their
self use or office record.
● These data are not published. These unpublished
numerical information may, however, be used as
secondary data.

Precautions in the Use of
Secondary Data
● We know that secondary data are collected by
others to suit their specific requirements.
● Therefore, one needs to be very careful while
using these data.
● Connor has rightly stated,
“Statistics especially other people’s Statistics
are full of pitfalls for the users.”
● In order to assess the reliability, suitability and
adequacy of the data, the following points must
be kept in mind:

(1) Ability of the Collecting Organisation: One
should check the ability of the organisation which
initially collected the data. The data should be
used only if it is collected by able, experienced
and impartial investigators.
(2) Objective and Scope: One should note the
objective of collecting data as well as the scope
of investigation. Data should be used only if the
objective and scope of the study as undertaken
earlier match with the objective and scope of the
present study.

(3) Method of Collection: The method of collection
of data by the original investigator should also be
noted. The method adopted must match the nature of
investigation.
(4) Time and Conditions of Collection: One should
also make sure of the period of investigation as well
as the conditions of investigations. For example,
data collected during war times may not be suitable
to generalise certain facts during peace times.
(5) Definition of the Unit: One should also make
sure that the units of measurement used in the
initial collection of data are the same as adopted in
the present study. If the unit of measurement
differs, data must be modified before use.

(6) Accuracy: Accuracy of the data should also
be checked. If the available data do not conform
to the required degree of accuracy, these should
be discarded.
In short, as stated by Bowley,
“It is never safe to take published Statistics
at their face value without knowing their
meaning and limitations.”

Two Important Sources of
Secondary Data
(1) Census of India: Census of India is a decennial
publication of the Government of India.
● It is published by Registrar General and Census
Commissioner, India.
● It is a very comprehensive source of secondary
data. It relates to population size and the various
aspects of demographic changes in India.
● Broadly, it includes statistical information on the
following parameters:
(i) Size, growth rate and distribution of population
in India.
(ii) Population projections.

(iii) Density of population.
(iv) Sex composition of population.
(v) State of literacy.
Census of India is a comprehensive enquiry on
population size and the related parameters of
change covering each and every household of the
country.

(2) Reports and Publications of National
Sample Survey Office (NSSO)
● NSSO is a government organisation under the
Ministry of Statistics and Programme
Implementation.
● This organisation conducts regular sample
surveys to collect basic statistical information
relating to a variety of economic activity in rural
as well as urban parts of the country.
● Unlike Census of India, Reports and
Publications of National Sample Survey Office
are based on ‘sample’ study of the population
universe.

Presented by –
Ritvik Tolumbia
CS, CWA, M.Com (ABST), M.A (Eco), B.Ed

Chapter 2 collection of data

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