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Point Estimate
.Interval Estimate
Confidence Intervals
Confidence Level
Margin of Error
When a parameter is being estimated, the estimate can be either a single number or range
of numbers.In above if estimate is a single number, the estimate is called a "point
estimate.
An interval estimate is defined by two numbers, between a population parameter is
expressed.
Confidence intervals are preferred to point estimates.
The confidence level describes that a particular sampling method will produce a
confidence interval which includes the true population parameter.
In a confidence interval, the range of values above and below the sample statistic is called
the margin of error.
A parameter is a value calculated in a population. A statistic is a value computed in a
sample to estimate a parameter.
Example:
For example, suppose the a newspaper conducts an election survey and reports that the oppostion
candidate will receive 30% of the vote. The newspaper states that the survey had a 5% margin of
error and a confidence level of 95%. These findings result in the following confidence interval:
We are 95% confident that the oppostion candidate will receive between 25% and 35% of the
vote.
Explanation : The confidence level is not affected by the margin of error. When the margin of
error is small, the confidence level can low or high or anything in between. A confidence interval
is a type of interval estimate, not a type of point estimate. A population mean is not an example
of a point estimate; a sample mean is an example of a point estimate.
Advantages :
Disadvantages:
To collect all of the information for a population it would likely take a great deal
of time, which means more effort and money.
The disadvantage of estimating is that you lose precision. You rely on other
people or on machines to provide the exact answer. Another disadvantage is that
two different people estimating crowd size can come up with different answers.