ESTIMATION is a branch of statistical inference or decision theory. I deals with the estimation of unknown characteristic of « population, IU is defined as “The entire process of using an estimator to produce an estimate of unknown parameter of population is called estimation’ Estimator: Aa statistic used to estimate a parameter is called an estimator, It is also known as a decision function eg the sample mean x is an estimator of j and p isan estimator of \ value obtained trom sample information by applying a rule or formula is called an estimate of population parameter from the s ample was drawn, e.g. the mean height of 20 students taken randomly trom the unive y enrolled students is 65 inches, so 65 inches is an estimate of the averay height of the all students enrolled in the university. Methods of Estimation: There are two methods of estimat 1. The Point Estimation 2. The Interval Estimation 1. The Point-Estimation A process of finding a single value used to estimate @ population paramete is known as point estimation. e.g. The 5 inches is a point estimate of the population mean fi. terval Estimation A process of finding range of values used to estimate a population parameter is known as interval estimation, e.g. av interval estimation of the population mean wis a process of finding an interval like sucb with some level of confidence. Where and “b’ depend upon the point estimator for a particular sample chosen and also on the ampling distribution of the estimator Properties of Goad 1 Estimator A point estimator is said to be a good estimator i t possesses the following properties: 2 Uubiasne; An estimator is said 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 8 is an estimator of the parame! cr 0, then 8 will be called an unbiased estimator iff nd if ‘ ‘Scanned with CamScanneri) (8) 40. then EQ) =e we say that @ isa biased estimator of 0. e.g. ¥ is an unbiased estimator of 41 ats Consisteney An estimator is said to be consistenée, if the statistic used as an estimator becomes closer and closer to the true value of the population parameter being estimated as sample size increases. If @ is an timator of the parameter 0, then 8 will be called a consistent estimator if n — and 8 —> 0. e.g: ¥ isa consistent estimator of wasn % and ¥ > yt {Note: An unbiased estimator is always a consi: -stimator but a consistent estimator may or may ent not be an unbiased} Etfcienes An unbiased estimator is said to be an efficient if the variance of its sampling distribution is less than that of the variance of the sampling distribution of any other unbiased estimator of the same parameter. Suppose there are two unbiased estimators @,and B,of the parameter 0. If var(é,) < var(8.), then 8, will be an efficient estimator. The particular example is that the sample mean (¥ ) and the sample median (%) are two unbiased e imators of the population mean pt, but the var( ¥) < var( 2), so the sample mean (¥ ) is an elf ent estimator as compare to the sample median (2) Sufficien An estimator is said to be a sufficient when no other statistic computed from the same sa ample can provide any additional information oun the parameter being estimated. In other words, sufficiency can be defined as “a statistic used ‘an estimator uses all the information that are contained in the sample, For example the sample mean (¥ ) uses all the into: ation contained in the sample while the sample median (*) does not. - Mean Square Liror (MSE), is defined as the expected value of the squared differences between all possible values of estimator nd the true value of the population parameter. Let é be any estimator (either biased or unbiased), then 1¢ MSE about the true value of 0 is given as MSE@) =~ E(B of = Efé-E(8) + E[6- Ey + = Var(8) + Bias? [ECE) ~ of 2 -14)} 4 E03 ~2 {E(8)~ E(B} 6 ECS) -0 4 = Var(8) + Bias? -2 {0}4 (4) —0 - Var(8) + Bias Variance of statistic minus square of bias If B isan unbinced detimatae dn ton ee ‘Scanned with CamScannerjased estimators when there is no unbiased Use of MSE: It is used to compare the efficieney of two b ; 1 smaller MSE will be used to estimator to estimate the value of parameter, A biased estimator having smaller MSE will estimate the parameter Contidence Interval wn probability (95% or An interval constructed trom the sample data in such a way that it has a known probability : parameter to be estimated, then the 99%) of containing a parameter to be estimated. Suppose 0 is a parameter to be estimated, t ven us: ity that two bounds ‘a’ and *b’ would contain the tue value of 0 i PlasOsb]=1-a tis stated as “we are 100(1 ~ a)% confident that the interval from “a” to “b* contains the tue va probs hue of 0. ain the tue Where « is the level of significance or the probability that the interval {a,b} does not Value of U. The values of a’ and *b’ depend upon the sampling distribution of the statistic or estimator used to estimate 0. In practice the interval estimate is used to estimate a parameter as it is a reliable estimate. Estimation of the population meai yt 1. {he point estnation of ut : The population mean t can be estimated by using statistic ¥ or £ The sampling distribution of the ¥ or # are centered at yt. but the Var(* ) is smaller than Var(.) or any other estimator, Hence in most of the applications ¥ is used as a point estimate for the population mean wt. So we take sample mean ¥ asa point estimate of stimation of u : Let ¥ be the point estimator of 1. The sampling distribution of ¥ is Fou )and the Standard Normal Variate (SNV) is z= ” avn wand +Z.o are the two values in the distribution of SNV which contain the value of Z at (a) point ¥ with probability (1 - a). Hence the 100(1 — u)% confidence interval of Z may be written as (1) 1001 ~ a)% confidence interval of the population mean yt may be obtained by putting the value Z trom (a) in (1). Le. = multiplying each sides by of in = us G/Vn <— fh <-F 42) X0/ Vn subtracting from each sides ¥ > tus o/Vn > W> 24 ) at center of each interval indicates the position of the point estimate for each ¥ random sample, Most of the intervals are seen to contain jt but not in every case, All of these intervitls are of the same width, as the width of each interval depends only on the choice of ze. The larger the value of Zu, We chose. the wider we make all intervals and more confident we can be that the particular sample selected will produce an interval that contains the unknown parameter 1 To compute 1001 -af confidence interval for yt, we have assumed that 62 is known. Since this is generally not the ease, we shall repla ice 6 by the sample standard deviation s, provided that n > 30. {sampics A sample of 16 values is selected trom a normal population with unknown mean y and known variance 4. The sample mean was obtained 6.2. find 90%, 92%. 94%, 95% (5.22, 7.18). 96%. 98% and 99% confidence intervals for the true mean of the population. Using the following expression we will obtain 7 different intervals. pecs x vn Solve some more problems, ‘Scanned with CamScanner2: Draw all possible samples of's 1821.2 3 without replacement from the population 3 NN 30 and find mean and median from each sample, Verily that both estisnaly aire unbiased and sample mean is more efficient estimator as evmpare ty the medi Also construct 95% confidence interval for cach sample using sample mean. Coun intervals containing tue mean and not containing true mean, find pereentayes of the intervals and interpret the results. duestion: The mean and standard deviation for quality grade point averages of a random sample of 36 colleges are calculated to be 2.6 and 0.3 respectively. Kind 95%. 99% contidenee inte! the population mean, (2.50, 2.7), (2.471, 2.729) tion 3 inches Question: A sample of 40 observations from a population with standard devi sample mean 64.2 inches. Find 90% confidence: 64.98 inches) iMerval for population mei How bar sa sample size should be for estimating the population’s me is used as un estimate of p. we can be 100(1-0)% confident that th error (e = exceed a speci ed aniount e when the sample size is To estimate the sample size all fractional values are rounded up tw the next whole number - The above formul is applicable if ois known. Ifo is unknown a preliminary sample of size n 2 30 should be se ted to provide an estimate of ©. By using the above formula, we can determine Approximately how many observations are needed to provide the desired degree of accuracy. ‘Scanned with CamScannerIf we draw all possi amples of size n fiom a population, find mean x for cach sample and construct 100(1-a)% vontidence interval for eae ample, these confidence intervals can be shown a Different samples will yield d The ci ular dots (>) at center of each interval indicates ion of the point estimate for each ¥ random sample. Most of the intervals are seen to contain yt but not in every ease. All of these intervals are of the same width, 1s the width of each interval depends only on the choice of z.; The larger the Value of Zu We chose, the wider we make all intervals and more confident we ean be that the particular imple selec ed will produce an interval that contains the unknown parameter 1. ‘To compute 100(1-a)¥ confidence interval for jt, we have assumed that 6° is known, Since this is gen ally not the case. we shall replace 6 by the sample standard deviation S, provided that n> 30 Fsampie: A sample of 16 values is selected from a normal population with unknown mean wand find 90%, 92%, 94%, 7.18). 96%, 98% and 99% confidence intervals for the true mean of the population. Using the following expression we will obtain 7 different intervals. known variance 4. The sample mean was obtained 6, 92 Solve some more problems. ‘Scanned with CamScanner