An important method of obtaining estimates having unbiased and

consistency properties is known as “ method of maximum likelihood”.

In most cases this method gives estimate which is consistent as well as

unbiased while in afew cases it is consistent but not unbiased. We shall
define the ‘ Likelihood function’ with it’s properties without any proof
of the theorem and learn how to apply them in typical known
distributions.

Let the r.v. Xi has probability density function fx(ө1,ө2,…өj)=P(Xi=x)

depending on the unknown parameters өj. Then the Likelihood function
is defined as :

L(x1,x2,x3,…,xn;ө1,ө2,…өj)= where
we have assumed all the r.v. are identically & independently
distributed.

The aim of defining the likelihood function in this way is to find value of
өj’s for a fixed sample (x1,x2,…xn) such that it gives a maximum value for
the chosen statistic. We intend to solve the system of equations:

known as likelihood equations.

We assert that this gives us maximum likely good estimates of the

statistic өj provided :

Test it in the binomial distribution , having likelihood function as :