UNIVERSITY EXAMINATION 2020/2021

YEAR 3 SEMESTER II EXAMINATION FOR THE DEGREE OF BACHELOR OF

ECONOMICS AND STATISTICS

SPS 2320 Theory of Estimation Year 3 Semester II

Date: Monday 13th September, 2021 Time: 1.30 pm – 3.30 pm

INSTRUCTIONS: Answer question One (Compulsory) and any other Two questions.
Question One (30mks)
a) Define the following terms as used in theory of estimation
i. Estimator (2mks)
ii. Sufficient statistics (2mks)
b) Distinguish between point and interval estimation (4mks)
c) Let 𝑥1 , 𝑥2 be a random sample of size 2 from a normal distribution with mean

𝜃and variance 1. Consider the expression 𝑑 = 𝜃̂ = 2⁄3 𝑥1 + 1⁄3 𝑥2 . . For the

loss function 𝐿(𝑑, 𝜃) = 3𝜃 2 (𝑑 − 𝜃), find the risk function. (5mks)

d) Let 𝑥1 , 𝑥2 , … , 𝑥𝑛 be a random sample from a population having the distribution
(𝜆 + 1)𝑥 𝜆 , 0 < 𝑥 < 1
𝑓(𝑥, 𝜆) = {
0, 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Where 𝜆 > 0. Find the methods of moments estimator for 𝜆. (5mks)
e) Consider a random sample 𝑥1 , 𝑥2 , … , 𝑥𝑛 from a normally distributed population
with mean 𝜇 and variance 1. Find the uniformly minimum variance unbiased
estimator for 𝜇. (6mks)
f) The mean of the quality point averages of a random sample of 36 students
is calculated to be 2.6 with standard deviation of 0.3. find the 95% and 99%
interval estimates for the mean of the entire class. (6mks)
Question Two
a) Discuss four properties of point estimators (8mks)

b) Consider the following estimators of 𝜃 for a random sample of size 2 from

a population with a standard normal distribution.

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 𝜃̂1 = 1⁄3 𝑥1 + 2⁄3 𝑥2

𝜃̂2 = 3⁄4 𝑥1 + 1⁄4 𝑥2

𝜃̂3 = 1⁄2 𝑥1 + 1⁄2 𝑥2

(i) Which estimator is most efficient? (8mks)

(ii) Find the relative efficiency for each pair of estimators. (4mks)

Question Three

a) Let 𝑥1 , 𝑥2 , … , 𝑥𝑚 be a random sample of size m from a normal population

with mean 𝜇1 and variance 𝜎12 . Let 𝑦1 , 𝑦2 , … , 𝑦𝑛 be a random sample of size
n from a normal population with mean 𝜇2 and variance 𝜎22 . Assume that
these samples are independent of each other. Construct a confidence
interval for 𝜇1 − 𝜇2 . (10mks)
1 1
+ 1+(𝑥−𝜃)2 , −∞<𝑥 <∞
b) Given𝑓(𝑥, 𝜃) = { 𝜋 . Find 𝐼(𝜃) (10 mks)
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒

Question Four

−𝜃𝑥
a) Let x be a random variable with pdf 𝑓(𝑥, 𝜃) = { 𝜃𝑒 , 𝑥 > 0 . find
0, 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
the maximum likelihood estimator of 𝜃 and find the Cramer-Raw
lowerbound for the estimator. (12mks)
𝑛 ∑𝑛
𝑖=1(𝑥𝑖 −𝑥̅ )
b) Show that 𝑛−1 𝑆 2 is an unbiased estimator for 𝜎 2 given that 𝑆 2 (8mks)
𝑛

Question Five

a) A city health inspector withes to determine the mean bacteria count per litre of
water at a beach. Assume that the number of water is normally distributed with
mean 𝜇 and standard deviation 𝜎 . the inspector collects 10 samples of water and
find the bacteria count to be.
38.7, 40.7, 37.2, 36.6, 35.9
34.7, 37.6, 35.1 37.5, 35.6
Using a prior distribution of 𝑁(30,100), find the Baye’s estimate value. (7mks)
b) Show that 𝑆 2 = ∑(𝑥𝑖 − 𝑥̅ )2 is MSE consistent for 𝜎 2 where 𝐸(𝑆 2 ) ≠ 𝜎 2 (7mks)
2 ).
c) Given that is a random variable such that 𝑥~𝑁(0, 𝜎 𝐹ind the sufficient
statistic for 𝜎 2 . (6mks)

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