Chapter 3 Estimating a Parameter: Which Population Values Are Plausible?
Key concepts: point estimate, interval estimate, confidence (level), precision, standard error, critical value, confidence interval.
Summary
In this chapter, we set out to make educated guesses of a population value (parameter, often called “the true value”) based on our sample. This type of guessing is called estimation. Our first guess will be a single value for the population value. We merely guess that the population value is equal to the value of the sample statistic. This guess is the most precise guess that we can make, but, most likely, it is wrong.
Our second guess uses the sampling distribution to make a statement about the approximate population value. In essence, we calculate an interval that we are confident will contain the population value. We can increase our confidence by widening the interval, but this decreases the precision of our guess.