ESTIMATION OF

PARAMETERS
Lesson 1: COMPUTING THE POINT OF
ESTIMATE OF THE POPULATION
YOU ARE EXPECTED TO:
 Understand the concepts of estimation
 Distinguish between point estimate and interval
estimate; and
 Find the point estimates of population means and
proportions
WAKE – UP TIME
Time Tally Frequency

5:00 11 2

5:30 111 3

6:00 11111-11 7

6:30 11 2

7:00 1 1

7:30 1 1

Total 16

Average 5.9 =5:55am

REMEMBER THESE:
 The arithmetic average computed from the table
is also known as the mean.
 Suppose we proceed to compute the mean of the
means for all ten (10) classes.
 The final result is a number that is called point
estimate of the mean  of the population where the
samples come from.

Xx 
 “The means of the means is equal to the population
mean  (read myu)
RECALL:
 Parameters are numerical descriptive measures
of population and they are usually unknown.
 We can estimate population parameters from
sample values.
 Sample means and standard deviations are used
to estimate population values.
 An estimate is a value or a range of values that
approximate a parameter. It is based on sample
statistics computed from sample data.

 Estimation is the process of determining

parameter values
ACT 2: RESTAURANT SERVICE QUALITY
Susan, a TLE researcher, looked at the average time ( in minutes) it
takes a random sample of costumers to be served in a restaurant.
From 40 customers, the following information was obtained. What is
the average wait time? ___________

8 8 10 18 10 13 8 10 8 10
12 10 16 16 12 15 12 12 9 15
10 20 20 12 10 10 16 10 18 12
15 12 15 14 15 16 15 12 8 8

1. What is the mean of the sample? ___________ minutes.

2. This value is called _____________ of the population mean μ.
3. Based on the observation of the mean, would you patronize
the restaurant?
 A population may be finite or infinite.
 A finite population is countable.

 An infinite population is a hypothetical collection

of elements such as all the results of a coin
tossing experiment to determine the probability
of getting heads and tails.
POPULATION PARAMETER
 Unknown fixed values
 In the example, there are two ways to report the
results:
1. Report a number that describes the average wait
time. This number is called point estimate.
 In this case, the mean is the best estimator.

2. Report a range of values that contains the number

that truly describes the wait time. This number is
called interval estimate.
 A point estimate is a specific numerical value of
population parameter. The sample mean x is the
best point estimate of the population mean.

 An interval estimate is a range of values that may

contain the parameter of a population.
ESTIMATES PROVIDE LIMITED
INFORMATION

 We supplement the information by stating that

the sample is a random sample.
 In our example, we have a random sample whose
mean is x  12.5min and whose standard deviation s
is 3.41 minutes.
 The sample standard deviation can serve as the
estimate of б.
HOW CONFIDENT ARE WE ABOUT OUR
ESTIMATION?

 We take as many random samples as possible

from the population of interest compute the
sample statistics, and then careful compare the
results.
 Formulate conclusions and based on these, we
make particular decisions.
 A good method of estimating a population
parameter is described as one where the
estimates from many samples are equal to the
true population parameter.
 The sample statistic is an unbiased estimate.

 If across many samples, a sample statistic

departs from the true population value, then the
estimate is said to be biased.
PROPERTIES OF A GOOD ESTIMATOR:
 mean of a sample statistic = the true population
parameter , then the sample statistic is an
unbiased estimate
 Across many sample repeated samples, the
estimates are NOT very far from the true
parameter value.
 . . . .
. . . . . . . .
. . . . . . . . . . . . . . . . . .
 
Negative Bias Unbiased
(Under estimate) (On target estimate)

. .
. . . .
. . . . . . . . .

Positive bias
(Over estimate)
ACT 3: COCO JIUCE
 Mr. Santiago’s company sells bottled coconut
juice. He claims that a bottle contains 500 ml of
such juice. A consumer group wanted to know if
his claim is true. They took six random samples
of 10 such bottles and obtained the capacity, in
ml, of each bottle. The result is shown as follows:
 Using the EXCEL Program
 Manual Estimation of the Population Mean
ACT 4: COCO JUICE REVISITED
ACT 5: MORE ON COCO JUICE
 Look at the 600 bottles of coconut juice as
consisting of 10 columns and 6 rows.
 Compute the means of the column samples.

 What is the overall mean? This value is also an

estimate of the population mean μ.
ACT 6: COMPUTING MORE MEANS
 Compute the remaining column means.
 Compute the mean of the means.

 Enter your values in a table.

 Based on the 10 random samples, what is the

point estimate of the population mean?
 Based on the ten random samples, the point
estimate of the population parameter is ____ ml.
 Mean of the means is equal to the population
mean.
 The mean of the means of the samples is the point
estimate of the population mean
INTERPRETATION:

 We interpret the result by saying that the claim

is different from the computed value. That is the
computed mean _________ based on the sample is
(equal to, slightly less than, slightly more than)
the claimed value of 500 ml.
 What action would you make?

 Other than mean, we also compute the standard

deviation s to describe the dispersion of the
scores in a distribution.
ESTIMATION OF PARAMETERS
UNDERSTANDING CONFIDENCE INTERVAL ESTIMATES
FOR THE POPULATION MEAN
YOU ARE EXPECTED TO:
 Define confidence level;
 Define confidence interval;

 Apply the normal curve concepts in computing

the interval estimate; and
 Compute confidence interval estimates.
ACTIVITY 1: DETERMINING WEIGHTS IN
KILOGRAMS
 Form five groups and name each Group A, B, C, D
and E. Assume that these groups are random.
Tasks:
 Using weighing scale, find the weight of each group
member carefully.
 Compute the mean weight and the standard deviation of
each group.
 Compute the mean of the group means.
 How would you describe your group based on the result of
the computation?
 What is your estimate of the mean of the population where
your group seems to belong?
 Reflect on your estimation. Are you confident about it? To
what extent are you confident? Express your confidence as
percentage?
 Another way of estimating a parameter is by
using an interval estimate.
 An interval estimate, called a confidence interval,
is a range of values that is used to estimate a
parameter. This estimate may or may not contain
the true parameter value.
DETERMINING AN INTERVAL ESTIMATE
 A degree of confidence (expressed as a percentage
such as 95%) that the interval contains the true
and fixed parameter is made.
 These confidence intervals are constructed wide
enough so that 95% of them contain the true
population parameter and 5% do not.
 The value 95% is also known as the confidence
level.
CONFIDENCE LEVEL
 The confidence level of an interval estimate of a
parameter is the probability that the interval
estimate contains the parameter.
 It describes what percentage of intervals from
many different samples contain the unknown
population parameter.
ACTIVITY 2: MEANING OF 95% CONFIDENCE
Tasks:
STANDARD NORMAL DISTRIBUTION
CONFIDENCE INTERVALS FOR LARGE
SAMPLE
  
 Lower confidence boundary or limit X  z  
2 n

 Upper confidence boundary or limit X  z   

  
2 n
     
X  z      X  z  
2 n 2 n
 For a 90% confidence interval, zα/2 = ±1.65; for 95%
confidence interval, zα/2 = ±1.96 and for a 99%
confidence interval, zα/2 = ±2.58.
DETERMINING INTERVAL ESTIMATES
 In the general formula for a confidence interval,

the term z 
   is called margin of error,

2  n
denoted by E, which defined as the maximum
likely difference between the observed sample
mean and the true value of the population mean
μ.
A FOUR – STEP PROCESS IN COMPUTING
THE INTERVAL ESTIMATE
1. Describe the population parameter of interest (e.g.,
mean μ)
2. Specify the confidence interval criteria.
a) Check the assumptions
b) Determine the test statistic to be used.
c) State the level of confidence.
3. Collect and present sample evidence.
a) Collect the sample information
b) Find the point estimate
4. Determine the confidence interval.
a) Determine the confidence coefficient (e.g. zα/2 )
b) Find the maximum error E of the estimate.
c) Find the lower and the upper confidence limits.
d) Describe / interpret the results.
APPLYING NORMAL CURVE CONCEPTS:
 Example 2: Hours Spent on Watching Television
A researcher wants to estimate the number of hours
that 5 – year old children spend watching television. A
sample of 50 five – year old children was observed to have
a mean viewing time of 3 hours. The population is normally
distributed with a population standard deviation α = 0.5
hours, find:
a) The best point estimate of the population mean
b) The 95% confidence interval of the population
mean
A. POINT ESTIMATE

Steps Solution
1. Describe the population The parameter of interest is the mean μ of the TV
parameter of interest viewing time of all 5 – year old children.
2. Specify the confidence interval criteria.
The sample size of 50 children is large enough for the
a. Check the assumptions CLT to hold. So, the sampling distribution of means is
normal.

b. Determine the test statistic

The test statistics is the z, using σ = 0.5
to be used.

c. State the level of The questions asks for a 95% confidence, or α =

confidence. 0.05.
3. Collect and present sample evidence.
The sample information consists of sample mean
a. Collect the sample
= 3, n = 50, and σ = 0.5.

The point estimate for the population mean is 3

b. Find the point estimate
(the sample mean)
B. 95% CONFIDENCE INTERVAL
Steps Solution
4. Determine the confidence interval
a. Determine the confidence
The confidence coefficient is 1.96
coefficient.
    0.5 
E  z    1.96  
2  n  50 
b. Find the maximum error E.
E  19.6  0.07 
E  0.14
     
X  z      X  z  
2  n 2  n
c. Find the lower and the upper  0.5   0.5 
confidence limits. 3  1.96      3  1.96  
 50   50 
3  0.14 to 3  0.14
2.86 to 3.14
Thus, we can say with 95% confidence that the
interval between 2.86 hours and 3.14 hours
d. Describe the results
contain the population mean μ based on 80 five –
year old children’s TV viewing time.