Learning Objectives

At the end of this module, you should be able to:

1. Explain the general concepts of estimating the parameters of a

population or a probability distribution

2. Explain important properties of point estimators, including bias,

variance, degrees of freedom and mean square error

3. Apply the Central Limit Theorem in Sampling distribution

problems
Table of Contents

01
Inferential
03 Sampling
Statistics Distribution

02 Point 04
The Central
Limit Theorem
Estimation
Inferential Statistics

Inferential statistics is the

branch of statistics that
focuses in making
decisions or drawing
conclusions about a
specified population.
 Inferential Statistics

• The field of statistical inference consists of those methods used

to make decisions or to draw conclusions about a population.
• These methods utilize the information contained in a sample
from the population in drawing conclusions.
• Statistical inference may be divided into two major areas:
1. Parameter estimation
2. Hypothesis testing
Two Major Areas of Inferential Statistics

Parameter Estimation Hypothesis Testing

use sample data to there is no emphasis on
calculate a quantity estimating yields; instead,
that is in some sense the focus is on drawing
a realistic value of conclusions about a
the exact mean. stated hypothesis.
Estimation
A process whereby we select a random sample
from a population and use a sample statistic to
estimate a population parameter.
Examples Of Estimation

1. an auto company may want to estimate the mean fuel

consumption for a particular model of a car
2. a manager may want to estimate the average time taken by
new employees to learn a job;
3. the U.S. Census Bureau may want to find the mean housing
expenditure per month incurred by households;
4. the AWAH (Association of Wives of Alcoholic Husbands) may
want to find the proportion (or percentage) of all husbands who
are alcoholic.
 Estimations Lead to Inferences

Take a subset of
the population
Estimations Lead to Inferences

Try and reach

conclusions
about the
population
The estimation procedure involves the following steps:

1. Select a sample.
2. Collect the required information from the members of the sample.
3. Calculate the value of the sample statistic.
4. Assign value(s) to the corresponding population parameter.
Inferential Statistics involves the ff. Distributions:

A population distribution – variation in the larger

group that we want to know about.
A distribution of sample observations – variation in the
sample that we can observe.
A sampling distribution – a normal distribution whose
mean and standard deviation are unbiased estimates
of the parameters and allows one to infer the
parameters from the statistics.
Estimation
Point Estimation
the process of estimating a
parameter from a probability
distribution based on observed
data from the distribution
 Point Estimation
Point Estimation of a population parameter θ is applied to choose a
singular number to describe the population based from a
sample data. This chosen numerical value of a sample statistic
will be used to describe the population.

A point estimate of some population parameter θ is a single numerical value 𝜃 of a

statistic Θ. The statistic Θ is called the point estimator.
Estimation
Point Estimator
A point estimator draws inference about a population by
estimating the value of an unknown parameter using a single
value or a point.
General Concepts of Point Estimation

Bias refers to whether an

estimator tends to either over or
underestimate the parameter.

Sampling variability refers to how

much the estimate varies from
sample to sample.
Unbiased Estimators

An estimator θ is unbiased when the

expected value of the population
parameter is equal to the sample
statistic value.
the mean of the sampling distribution of
is equal to the population
parameter θ.
What can I do to Ensure Unbiasedness in my Data or
Sampling Distribution?

1. Take your sample according to sound statistical practices.

2. Avoid measurement error by making sure data is collected with
unbiased practices. For example, make sure any questions posed
aren’t ambiguous.
3. Avoid unrepresentative samples by making sure you haven’t
excluded certain population members (like minorities or people
who work two jobs).
 Three Properties of a Good Estimator
1. The estimator should be an unbiased estimator. That is, the
expected value or the mean of the estimates obtained from
samples of a given size is equal to the parameter being
estimated.
2. The estimator should be consistent. For a consistent
estimator, as sample size increases, the value of the estimator
approaches the value of the parameter estimated.
3. The estimator should be a relatively efficient estimator. That
is, of all the statistics that can be used to estimate a
parameter, the relatively efficient estimator has the smallest
variance.
Sampling Distribution

increasing the size of the samples chosen

from the population of size 10 resulted in
a distribution of the means that was
more closely clustered around the true
mean

the sampling distribution of the sample

means is approximately normal
 Properties of the Sampling Distribution

 The mean of this sampling distribution approximates the

population mean,
 The standard deviation of this sampling distribution approximates
the standard deviation of the population divided by the square
root of the sample size:
 If the sample size is sufficiently large (>30), the sampling
distribution of sample means can be assumed to be approximately
normal, even if the population is not normally distributed.
The Central Limit Theorem
There are two alternative forms of the theorem, and both alternatives are
concerned with drawing finite samples size n from a population with a known
mean, μ, and a known standard deviation, σ.

1. if we collect samples of size n with a “large enough n,” calculate each

sample’s mean, and create a histogram of those means, then the resulting
histogram will tend to have an approximate normal bell shape
2. if we again collect samples of size n that are “large enough,” calculate the
sum of each sample and create a histogram, then the resulting histogram
will again tend to have a normal bell-shape.
 If samples of size n are drawn at
random from any population with a
finite mean and standard deviation,
then the sampling distribution of the
sample means, x, approximates a
normal distribution as the sample size
increases beyond 30
THE CENTRAL LIMIT THEOREM
The Central Limit Theorem
Applying the Central Limit Theorem

Finding the Probability of Sampling Distributions

1. Calculate the sampling distribution mean and standard deviation.

2. Draw a normal curve and shade the desired area.

3. Convert the values of X to z values.

4. Find the corresponding area using the reference table.

The Central Limit Theorem

It’s important to remember two things when you use the central limit theorem:
1. When the original variable is normally distributed, the distribution of the
sample means will be normally distributed, for any sample size n.
2. When the distribution of the original variable is not normal, a sample size
of 30 or more is needed to use a normal distribution to approximate the
distribution of the sample means. The larger the sample, the better the
approximation will be.
Sample Problems

An electronics company manufactures

resistors that have a mean resistance of
100 ohms and a standard deviation of
10 ohms. The distribution of resistance is
normal. Find the probability that a
random sample of n = 25 resistors will
have an average resistance less than 95
ohms.
Sample Problem

A. C. Neilsen reported that children between

the ages of 2 and 5 watch an average of 25
hours of television per week. Assume the
variable is normally distributed and the
standard deviation is 3 hours. If 20 children
between the ages of 2 and 5 are randomly
selected, find the probability that the mean of
the number of hours they watch television will
be greater than 26.3 hours.
Sample Problem
The average time spent by construction
workers who work on weekends is 7.93
hours (over 2 days). Assume the
distribution is approximately normal and
has a standard deviation of 0.8 hour. If a
sample of 40 construction workers is
randomly selected, find the probability that
the mean of the sample will be less than 8
hours.
 Do you have any questions?

CREDITS: This presentation template was created by Slidesgo,

including icon by Flaticon, and infographics & images from
Freepik