36 Statistics for mining engineering

The theory of estimation deals with the assessment of unknown parameters of the general
population that are based on a random experiment.

1.3.1 Estimator
A basic term of the theory of estimation is an estimator. This is understood as a clearly
defined function of the outcomes of a random trial implied by an unknown parameter θ of
the general population. If so, the estimator is a random variable.
Notice that if the point of interest is an unknown parameter θ of the general population
and that a random sample of size n is taken to estimate its value, then by applying the estima-
tor Tn we have the following situation:

Tn = f (X1, X2, …, Xn | θ) (1.88)

because every element of the sample can be treated as a random variable.

A value calculated based on a random sample taken tn of the estimator is called an estimate
of the unknown parameter θ. This estimate is given by the equation:

tn f ( x , x2 , ..., xn ) (1.89)

It is a number, the deterministic value.

1.3.2 Properties of estimators and methods of their construction

Theoretically, an infinite number of estimators can be constructed. Some of them will give
a worse assessment of the unknown parameter, some—better. Thus, we must have the pos-
sibility of making an evaluation of which estimator is better and which is worse. Or, to
be more precise, which estimator has better properties that will usually yield better esti-
mates because the estimator is a function. This gives us a tool with which to select a good
estimator.
There are two important items connected with each estimator, namely:
• the error of estimation
• the properties that characterise the selected estimator.
It is obvious that one can be almost certain that when making an estimation an error will
occur because a statistical inference is made based on a trial only. This error is called the error
of estimation.
It can be defined as:

d = Tn – tn (1.90)

The right side of the equation determines a certain random variable because the function
of a random variable is also a random variable. Therefore, the left side of the equation is also
a random variable. Therefore, the estimation error is a random variable. It has its own prob-
ability distribution and we are able analyse its basic parameters.
To achieve a precise estimation, i.e. to ensure a small error of estimation, it is necessary
to pay attention to both the correct sampling and the selection of an estimator with good
statistical properties.
A good estimator should be, among the other things, characterised by following properties:
• unbiasedness
• consistency
• efficiency
• sufficiency.

Book.indb 36 12/9/2013 12:22:44 PM