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Estimation of Parameters (Part 1)

Estimation involves using sample data to calculate point estimates and interval estimates of unknown population parameters. Point estimates are single values that estimate the population mean, while interval estimates provide a range of values that are believed to contain the true population parameter at a specified confidence level. The margin of error and confidence level are used to determine the interval estimate. Real-world examples where estimation is applied include estimating the mean amount of drink dispensed by a machine and estimating the mean sales of a salesperson based on a sample.

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Cayetano, Tara Leigh Martinez
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51 views21 pages

Estimation of Parameters (Part 1)

Estimation involves using sample data to calculate point estimates and interval estimates of unknown population parameters. Point estimates are single values that estimate the population mean, while interval estimates provide a range of values that are believed to contain the true population parameter at a specified confidence level. The margin of error and confidence level are used to determine the interval estimate. Real-world examples where estimation is applied include estimating the mean amount of drink dispensed by a machine and estimating the mean sales of a salesperson based on a sample.

Uploaded by

Cayetano, Tara Leigh Martinez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Estimation of

Parameters

Presented by:
Ms. Avegel A. Pradilla, LPT
OBJECTIVES:
❖ Define point and interval estimations, margin of error and
confidence level.
❖ Compute for the point estimate and interval estimate using
the margin of error and confidence level
❖ Discuss real life scenarios where estimation is applied.
LET’S PLAY GAME:

ES SE TI TI M
M AA TT IOOI N
N
LET’S PLAY GAME:

PON
I NI T E TS TS I M A ET TE
LET’S PLAY GAME:

II TN NT EE R A V L E T S
RVAL ESTIMATE I M A E T
ESTIMATION
Estimation is a procedure by which we obtain an estimate of the
true but unknown value of a population parameter by using the
sample observations from the population.
POINT ESTIMATES
The single value of a statistics calculated from a
sample. The sample mean is the best estimation of the
population mean.
EXAMPLE:
A random sample of n= 6 has the elements 1,
3, 6, 9, 12 and 5. Compute a point of estimate of
population means.
SOLUTION:
•
INTERVAL ESTIMATES
An estimate expressed by a range of values within which the true
value of the parameters is believed to lie. It is also a range calculated
from a sample statistics and standardized statistics, such as Z.

∙ Selection of the standardized statistics is determined by the


sampling distribution.
∙ Selection of Critical Values of the standardized statistic is
determined by the desired level of confidence.
Confidence Level (Degree of Belief)
∙ The reliability of an estimate is measured by confidence
level
•It is a confidence interval estimate of the unknown
parameter is an interval computed from a random sample
of n values with a statement of how confident (90%, 95%,
or 99%).
Confidence interval
∙ uses interval estimate to define a range of values that
includes the parameter being estimated with a specified
level of significance.
∙ The confidence interval is denoted by x̄ - E< μ < x̄ + E
MARGIN OF ERROR
•denote as E is the maximum error of estimate given by;
EXAMPLE 1:
A soft drink machine is regulated so that the amount of drink is
approximately normally distributed with a standard deviation
equal to 1.5 deciliters. Find a 90% confidence interval for the mean
of all drinks dispensed by the machine if random sample of 36
drinks had an average content of 22. 5 deciliters.
Step 2: Compute for
the Margin of Error
Solution:
Step 1: Identify the
given value
Step 3: Find the Confidence Interval
x̄ - E< μ < x̄ + E
22.5 – 0.41< μ < 22.5 + 0.41
22 < μ < 23

With 90% level of confidence, the interval of all


drinks dispensed by the machine is between 22
and 23
EXAMPLE 2:
A group of statistician wants to used the mean of a random
sample size n= 200 to estimate the average sales of 1,050 for milk
cartons of a salesman in a month with a standard deviation of 7.8
and 95% confidence level, construct the confidence interval of the
mean number of sales of the milk cartons by the salesman in a
month.
Step 2: Compute for
the Margin of Error
Solution:
Step 1: Identify the
given value
Step 3: Find the Confidence Interval
x̄ - E< μ < x̄ + E
1,050 – 1.08< μ < 1,050 + 1.08
1,049 < μ < 1,051

With 95% level of confidence, the interval means number of


sales of the milk cartons by the salesman in a month. is
between 1,049 and 1,051

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