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
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LET’S PLAY GAME:

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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