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Recall: Descriptive Statistics - an area in Applied Statistics that includes methods used to organize, summarize, and present data. Inferential Statistics - an area in Applied Statistics that includes methods used to make generalizations about some characteristics of the population based on information contained in the sample. Estimation - inference about a parameter is made by finding a single value or a range of values computed from the sample data that may be used to make a statement about the unknown value of the parameter. Point Estimator - a single statistic whose realized value is used to estimate the true but unknown value of the parameter. Interval Estimator - a rule that tells how to calculate the limits based on sample data that will form an interval within which the parameter is expected to lie with a specified degree of confidence. Hypothesis Testing - inference about the population (or the parameter, in particular) is made by assessing whether or not the sample data support an assertion made about the true value of a parameter. Population - a collection of items of interest in a statistical study. Sample - a subset of items that have been selected from the population. Parameter - a summary measure describing some characteristic of the population. Statistic - a summary measure describing some characteristic of the sample. Sampling Distribution - in is the probability (or relative frequency) distribution of a statistic in repeated sampling from the same population. Theorems on Sampling Distributions: Remarks on Sampling Distributions: 1. If all possible random samples of size n are 1. A statistic is a variable whose value depends only drawn with replacement from a finite population on the observed sample and may vary from sample to sample. size N with mean, , and standard deviation, , 2. The sampling distribution of a statistic will depend then: on the size of the population, sample, and the method of choosing the sample. 3. The standard deviation of the sampling distribution is called the standard error - it tells us 2. If all possible random samples of size n are the extent to which we expect the values of the drawn without replacement from a finite statistic to vary from different possible samples. population size N with mean, , and standard 4. If a statistic of the sampling distribution of some deviation, , then: statistic is equal to the parameter of interest, then we say that the statistic is an unbiased estimator. 5. A parameter may have many unbiased The factor is called the finite estimators; however, an ideal estimator of a population correction factor. parameter is one that has the smallest standard error among all unbiased estimators.
Central Limit Theorem De Moivre - Laplace Theorem States that when the sample size is sufficiently It was discovered by mathematicians Abraham de large (in practice, it is usually at least 30), the Moivre and Pierre-Simon Laplace. It states that for any random variable that is normal distribution can be used to approximate distributed with parameters will approximate the the sampling distribution. It gives way for the use of the Theorems on standard normal distribution for a sufficiently large Sampling Distributions when the sample size is sample size. It gives way for the use of the Central Limit sufficiently large. It also gives a guarantee that the standard error Theorem (CLT) for different sampling distributions, is reduced as the sample size increases, and that including the Bernoulli Distribution. The random variables can be standardized , such it approximates the normal distribution. It holds for populations that are symmetrically or that asymmetrically distributed.
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Hypothesis Testing A statistical hypothesis is an assertion/conjecture concerning one or more populations. Null Hypothesis (Ho) - the hypothesis that is being tested. Alternative Hypothesis (Ha) - the contradiction of the null hypothesis One-Tailed Test - a test where the alternative hypothesis specifies a one-directional difference for the parameter of interest. Two-Tailed Test - a test where the alternative hypothesis does not specify a directional difference for the parameter of interest. A test statistic is a statistic computed from sample measurements that is especially sensitive to the differences between the hypotheses. The critical region or region of rejection is the set of values of the test statistic for which the null hypothesis will be rejected. Critical Value - the value that separates the critical regions. Type I and II Errors - the errors made by rejecting the null when it is true, and accepting the null hypothesis when it is false, respectively. Level of Significance - denoted by , is the maximum probability of Type I Error the researcher is willing to commit. The P-value Tests for The smallest value of the level of Case Test Statistic Ha Critical Region significance, for which the null hypothesis 1. is known < will be rejected. > If the level of significance is at least the Pvalue, then the null hypothesis is reject. 2. is unknown < Since it is hard to compute for the exact P> value when the t-Test is used, the P-value interval is computed, that is, the values of that encloses the test statistic value. 3. n > 30 <
>
exceed a specified amount, e, when . When the value of P is unknown or cannot be approximated, then using P = 0.5 produces a maximum value; hence, a conservative formula for the sample size is .
Remarks: This test is approximately an -level test when the sample size is large enough. A rule of thumb is used in determining if the sample size is large enough is as follows: Test is valid if the product of the sample size and the population proportion (or its complement) is at least 5.
Interpretations for the Confidence Interval (A, B): If both A and B are positive, then 1 - 2 > 0, or 1 > 2 If both A and B are negative, then 1 - 2 < 0, or 1 < 2 If A is negative and |A| > |B|, then 1 - 2 0, or 1 2 If A is negative and |A| < |B|, then 1 - 2 0, or 1 2 The interpretations also apply for the interval estimator for the population proportions, but replace with .