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Precautions in Using Secondary Data

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Secondary data should be used with extra caution. Before using such data, the investigator must be satisfied with the reliability, accuracy, adequacy, and suitability of the data to the given problem under investigation.

Reliability of Secondary Data:

In order to know about the reliability of the data, we should satisfy ourselves about:

  1. the reliability, integrity, and experience of the collecting organization.
  2. the reliability of the source of information and,
  3. the methods used for the collection and analysis of the data.

It should be ascertained that the collecting agency was unbiased in the sense that it had no personal motives and right from the collection and compilation of the data to the presentation of results in the final form in the selected source, the data was thoroughly scrutinized and edited so as to make it free from errors as far as possible.

If the data were collected on the basis of a sample we should satisfy ourselves that:

  1. The sample was adequate (not too small).
  2. It was representative of the characteristics of the population, i.e., it was selected by proper sampling technique.
  3. The data was collected by trained, experienced and unbiased investigators under the proper supervisory checks on the fieldwork so that sampling errors were minimized.
  4. Proper estimation techniques were used for estimating the parameters of the population.
  5. The desired degree of accuracy was achieved by the compiler.

Suitability of Secondary Data:

Even if the data are reliable in the sense discussed above it should not be used without confirming that it is suitable for the purpose of an enquiry under investigation. For this, it is important:

  1. To observe and compare the objectives, nature and scope of the given enquiry with the original investigation.
  2. To confirm that the various terms and units were clearly defined and uniform throughout the earlier investigation and that these definitions are suitable for the present enquiry also. For instance, a unit like household, wages, prices, farm, etc., may be defined in many different ways. If the units are defined differently in the original investigation than what we want, the secondary data will be termed as unsuitable for the present enquiry.
  3. To take into account the difference in the timings of collection and homogeneity of conditions for the original enquiry and the investigation in hand.

Adequacy of Secondary Data:

Even if the secondary data are reliable and suitable in terms of the discussion above, it may not be adequate enough for the purpose of the given enquiry. This happens when the coverage given in the original enquiry was too narrow or too wide than what is desired in the current enquiry or in other words when the original data refers to an area or a period which is much larger or smaller than the required one.

For instance, if the original data is about the consumption pattern of the various commodities by the people of a particular state, then it will be inadequate if we want to study the consumption pattern of the population of the whole country. Similarly, if the original data relate to yearly figures for a particular phenomenon, it will be inadequate if we are interested in the monthly study.

Another important factor to decide about the adequacy of the available data for the given investigation is the time period for which the data are available. For example, if we are given the values of a particular phenomenon (say, profits of a business concern or production of a particular commodity) for the last 3-4 years, it will be inadequate for studying the trend pattern for which the values for the last 8-10 years will be required.

References:

Business Statistics – SC Gupta and Indra Gupta

Further Reading

Advantages and Disadvantages of Primary Data

Advantages and Disadvantages of Secondary Data

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