Friday, December 10, 2010

Point Estimate vs. Interval Estimate

In statistics, estimation refers to the process by which one makes inferences about a population, based on information obtained from a sample.
Point Estimate vs. Interval Estimate
Statisticians use sample statistics to estimate population parameters. For example, sample means are used to estimate population means; sample proportions, to estimate population proportions.
An estimate of a population parameter may be expressed in two ways:
  • Point estimate. A point estimate of a population parameter is a single value of a statistic. For example, the sample mean x is a point estimate of the population mean μ. Similarly, the sample proportion p is a point estimate of the population proportion P.
  • Interval estimate. An interval estimate is defined by two numbers, between which a population parameter is said to lie. For example, a < x < b is an interval estimate of the population mean μ. It indicates that the population mean is greater than a but less than b.

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