Inferential statistics is one of the two main branches of statistics.

Inferential statistics use a random sample of data taken from a population to describe and
make inferences about the population. Inferential statistics are valuable when examination
of each member of an entire population is not convenient or possible. For example, to
measure the diameter of each nail that is manufactured in a mill is impractical. You can
measure the diameters of a representative random sample of nails. You can use the
information from the sample to make generalizations about the diameters of all of the nails.

Descriptive statistics uses the data to provide descriptions of the population, either through
numerical calculations or graphs or tables. Inferential statistics makes inferences and
predictions about a population based on a sample of data taken from the population in question.

Statistics can be broken into two basic types. 

The first is known as descriptive statistics. This is a set of methods to describe data
that we have collected.

Ex. Of 350 randomly selected people in the town of Luserna, Italy, 280 people had the
last name Nicolussi. An example of descriptive statistics is the following statement :

"80% of these people have the last name Nicolussi." 

Ex. On the last 3 Sundays, Henry D. Carsalesman sold 2, 1, and 0 new cars
respectively. An example of descriptive statistics is the following statement :

"Henry averaged 1 new car sold for the last 3 Sundays." 

These are both descriptive statements because they can actually be verified from the
information provided.

The second type of statistics in inferential statistics. This is a set of methods used to
make a generalization, estimate, prediction or decision.
Ex. Of 350 randomly selected people in the town of Luserna, Italy, 280 people had the
last name Nicolussi. An example of inferential statistics is the following statement :

"80% of all people living in Italy have the last name Nicolussi."

We have no information about all people living in Italy, just about the 350 living in
Luserna. We have taken that information and generalized it to talk about all people
living in Italy. The easiest way to tell that this statement is not descriptive is by trying
to verify it based upon the information provided. 

Ex. On the last 3 Sundays, Henry D. Carsalesman sold 2, 1, and 0 new cars
respectively. An example of inferential statistics are the following statements :

"Henry never sells more than 2 cars on a Sunday."

Although this statement is true for the last 3 Sundays, we do not know that this is true
for all Sundays.

"Henry is selling fewer cars lately because people have caught on to his dirty tricks."

There is nothing in the information given that tells us that this statement is true. 

"Henry sold 0 cars last Sunday because he fell asleep in one of the cars on the lot."

Again, this statement is not verifiable based upon the information provided.

The major use of inferential statistics is to use information from a sample to infer
something about a population.

Descriptive Statistics
Descriptive statistics is the term given to the analysis of data that helps describe, show
or summarize data in a meaningful way such that, for example, patterns might emerge
from the data. Descriptive statistics do not, however, allow us to make conclusions
beyond the data we have analysed or reach conclusions regarding any hypotheses we
might have made. They are simply a way to describe our data.

Descriptive statistics are very important because if we simply presented our raw data it
would be hard to visulize what the data was showing, especially if there was a lot of it.
Inferential Statistics
We have seen that descriptive statistics provide information about our
immediate group of data. For example, we could calculate the mean and
standard deviation of the exam marks for the 100 students and this could
provide valuable information about this group of 100 students. Any group of
data like this, which includes all the data you are interested in, is called
a population. A population can be small or large, as long as it includes all
the data you are interested in. For example, if you were only interested in
the exam marks of 100 students, the 100 students would represent your
population. Descriptive statistics are applied to populations, and the
properties of populations, like the mean or standard deviation, are
called parameters as they represent the whole population (i.e., everybody
you are interested in).

Often, however, you do not have access to the whole population you are
interested in investigating, but only a limited number of data instead. For
example, you might be interested in the exam marks of all students in the
UK. It is not feasible to measure all exam marks of all students in the whole
of the UK so you have to measure a smaller sample of students (e.g., 100
students), which are used to represent the larger population of all UK
students. Properties of samples, such as the mean or standard deviation, are
not called parameters, but statistics. Inferential statistics are techniques
that allow us to use these samples to make generalizations about the
populations from which the samples were drawn. It is, therefore, important
that the sample accurately represents the population. The process of
achieving this is called sampling (sampling strategies are discussed in
detail here on our sister site). Inferential statistics arise out of the fact that
sampling naturally incurs sampling error and thus a sample is not expected
to perfectly represent the population. The methods of inferential statistics
are (1) the estimation of parameter(s) and (2) testing of statistical
hypotheses