Chapter10_STAT1100_LC.ppt", filename="Chapter10_STAT1100_LC.ppt", filename="Chap

# Chapter10_STAT1100_LC.ppt", filename="Chapter10_STAT1100_LC.ppt", filename="Chap

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Introduction to Estimation Statistics for Management and Economics Chapter 10

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Statistical Inference Statistical inference is the process by which we acquire information and draw conclusions about populations from samples. Parameter Population Sample Statistic Inference Data Statistics Information In order to make inferences, we require the skills and knowledge of descriptive statistics, probability distributions, and sampling distributions.
Estimation There are two types of inference: estimation and hypothesis testing; estimation is introduced first. The objective of estimation is to determine the approximate value of a population parameter on the basis of a sample statistic. E.g., the sample mean ( ) is employed to estimate the population mean ( ).

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Estimation The objective of estimation is to determine the approximate value of a population parameter on the basis of a sample statistic. There are two types of estimators: Point Estimator Interval Estimator
Point Estimator A point estimator draws inferences about a population by estimating the value of an unknown parameter using a single value or point. We saw earlier that point probabilities in continuous distributions were virtually zero. Likewise, we’d expect that the point estimator gets closer to the parameter value with an increased sample size. But, point estimators don’t reflect the effects of larger sample sizes. Hence we will employ the interval estimator to estimate population parameters…

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Interval Estimator An interval estimator draws inferences about a population by estimating the value of an unknown parameter using an interval. That is, we say (with some ___% certainty) that the population parameter of interest is between some lower and upper bounds.
Point & Interval Estimation For example, suppose we want to estimate the mean summer income of a class of business students. For n=25 students, is calculated to be 400 \$/week. An alternative statement is: The mean income is between 380 and 420 \$/week. point estimate interval estimate

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Qualities of Estimators Qualities desirable in estimators include unbiasedness, consistency, and relative efficiency: An unbiased estimator of a population parameter is an estimator whose expected value is equal to that parameter. An unbiased estimator is said to be consistent if the difference between the estimator and the parameter grows smaller as the sample size grows larger.
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