Topics: Inferential Statistics

• Inference
• Terminology
• Central Limit Theorem
• Estimation
– Point Estimation
– Confidence Intervals
• Hypothesis Testing
 Inferential Statistics

• Research is about trying to make valid

inferences
• Inferential statistics: the part of statistics
that allows researchers to generalize their
findings beyond data collected.
• Statistical inference: a procedure for
making inferences or generalizations about
a larger population from a sample of that
population
How Statistical Inference Works
 Basic Terminology

• Population: any collection of entities that

have at least one characteristic in common
• Parameter: the numbers that describe
characteristics of scores in the population
(mean, variance, s.d., etc.)
 Basic Terminology (cont’d)

• Sample: a part of the population

• Statistic: the numbers that describe
characteristics of scores in the sample
(mean, variance, s.d., correlation
coefficient, reliability coefficient, etc.)
Basic Statistical Symbols
 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
• Testing of Hypothesis: is a procedure that
enables us to decide on the basis of information
obtained by sampling whether to accept or reject
any specified statement or hypothesis regarding
the value of the parameter in a statistical problem
 Basic Terminology (con’t)

• Estimate: a number computed by using the

data collected from a sample
• Estimator: formula used to compute an
estimate
The Process of Estimation
 Types of Samples
• Probability
– Simple Random Samples
– Simple Stratified Samples
– Systematic Samples
– Cluster Samples
• Non Probability
– Purposive Samples
– Convenience Samples
– Quota Samples
– Snowball Samples
 Limits on Inferences and Warnings

• Response Rates
• Source of data
• Sample size and sample quality
• “Random”
 Estimation

• Point Estimation
• Interval estimation
– Sampling Error
– Sampling Distribution
– Confidence Intervals
 Point Estimation

• Point Estimation: of population parameter

provides us an estimate of a single value
calculated from the sample that is likely to
be closed in value to the unknown
parameter.
 BLUE / Criteria for Good Point
Estimators
• BLUE: An estimator called BLUE or Best Linear
Unbiased Estimator that is linear, unbiased, and has
minimum various among all linear unbiased estimators
• Criteria:
1. Unbiasedness
2. Consistency
3. Efficiency
4. Sufficiency
 BLUE / Criteria for Good Point
Estimators Continue
• Unbiasedness: An estimator is defined to be
unbiased if the statistic used as an estimator has its
expected value equal to the true value of the
population parameter being estimated i.e. E(X-
bar)= Mu
• Example:
• E (Sample Proportion P (=X/n))= P
• Variance is a biased estimator
 BLUE / Criteria for Good Point
Estimators Continue
• Consistency: An estimator is said to be consistent
if the statistic to be used as an estimator becomes
closer and closer to the population being estimated
as the sample size n increases.
• Example:
• Sample Mean is unbiased and consistent
• Sample proportion is unbiased and consistent
• Variance is biased but consistent
 BLUE / Criteria for Good Point
Estimators Continue
• Efficiency: An unbiased estimator is defined to be efficient if
the variance of its sampling distribution is smaller than that
of the sampling distribution of any other unbiased estimator
of the same parameter. Suppose there are 2 unbiased
estimators T1 and T2 of the same parameter, then T1 will be
said to be a more efficient estimator than T2 if Var(T1) <
Var(T2)
• Example:
• Sample Mean is unbiased and consistent and efficient (if
normally distributed)
 BLUE / Criteria for Good Point
Estimators Continue
• Sufficiency: An estimator is defined to be
sufficient if the statistic used as the estimator used
all the information that is contained in the sample.
• Example:
• Sample Mean is a sufficient estimator
• Sample proportion is a sufficient estimator
Pooled Estimators from Two or
More Samples
• Often we need to estimate certain
parameters by pooling (combining) the
values from two or more random samples
taken usually from the same population.
• Combined Mean
• Combined Variance
• Combined Proportion
 Interval Estimation

• Interval Estimation: an inferential

statistical procedure used to estimate
population parameters from sample data
through the building of confidence intervals
• Confidence Intervals: a range of values
computed from sample data that has a
known probability of capturing some
population parameter of interest
 Sampling Error

• Samples rarely mirror exactly the

population
• The sample statistics will almost always
contain sampling error
• The magnitude of the difference of the
sampling statistic from the population
parameter
 Sampling Distribution

• Sampling Distribution: a theoretical distribution

that shows the frequency of occurrence of values
of some statistic computed for all possible samples
of size N drawn from some population.

• Sampling Distribution of the Mean: A

theoretical distribution of the frequency of
occurrence of values of the mean computed for all
possible samples of size N from a population
Sampling Distribution of Mean
Sampling Distribution of Means and
Standard Error of the Means

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mu

Population mean
 Central Limit Theorem

• The sampling distribution of means, for samples

of 30 or more:
– Is normally distributed (regardless of the shape of the
population from which the samples were drawn)
– Has a mean equal to the population mean, “mu”
regardless of the shape population or of the size of the
sample
– Has a standard deviation--the standard error of the
mean--equal to the population standard deviation
divided by the square root of the sample size
Sampling Distribution of 1000 Sample
Means

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sample
averages
 Confidence Intervals
• A defined interval of values that includes the
statistic of interest, by adding and subtracting a
specific amount from the computed statistic
• A CI is the probability that the interval computed
from the sample data includes the population
parameter of interest
Factors Affecting Confidence Intervals
 Various Levels of Confidence

• When population standard deviation is

known use Z table values:
– For 95%CI: mean +/- 1.96 s.e. of mean
– For 99% CI: mean +/- 2.58 s.e. of mean
• When population standard deviation is not
known use “Critical Value of t” table
– For 95%CI: mean +/- 2.04 s.e. of mean
– For 99% CI: mean +/- 2.75 s.e. of mean
 95%Confidence Interval
95 times out of 100 the interval constructed
around the sample mean will capture
the population mean. 5 times out of 100 the
interval will not capture the population mean

95%

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mu
 99%Confidence Interval
99 times out of 100 the interval constructed
around the sample mean will capture
the population mean. 1 time out of 100 the
interval will not capture the population mean

99%

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mu
Effects of Sample Size
Process for Constructing Confidence
Intervals
• Compute the sample statistic (e.g. a mean)
• Compute the standard error of the mean
• Make a decision about level of confidence that is
desired (usually 95% or 99%)
• Find tabled value for 95% or 99% confidence interval
• Multiply standard error of the mean by the tabled
value
• Form interval by adding and subtracting calculated
value to and from the mean
• 95 % or 99% of the intervals found will contain the
population parameter µ
 Confidence interval Estimation
of a Population Mean
• 1. Normal Population with σ known
• 2. Normal Population with σ unknown
• 3. Non-Normal Population with σ known or
unknown (Large Samples)
 Confidence Interval For
Difference of Means
• To construct the confidence interval for the
difference between two means µ1-µ2:
1. Both the populations are normal with σ
known
• 2. Both the Populations are normal with σ
unknown
• 3. Both the populations are Non-Normal, in
which case, both sample sizes are large.
 Confidence Interval for
Population Proportion (Large
Sample)
• Let a random sample of size n (n>30) be
drawn from a binomial population with an
unknown proportion of successes p and let
the sample proportion be P=X/n, we can
estimate p by an interval to be computed
from the sample data.
 Confidence Interval for the
Difference Between Population
Proportion (Large Samples)
• We can estimate the confidence Interval for
the difference between population
Proportion (Large Samples)