INTRODUCTION TO

INFERENTIAL
STATISTICS
INFERENTIAL STATISTICS

What is inferential statistics (IS)?

Why do we need IS?
What do we do under IS?
What are the steps to be followed under IS?
What are the advantages of IS?
What are the limitations of IS?
 TWO PARTS OF IS

STATISTICAL TESTING OF
ESTIMATION HYPOTHESIS
STATISTICAL
ESTIMATION
BASIC WAYS OF ESTIMATING THE PARAMETERS

Point estimation: A Interval estimation: A process of

process of providing a providing an interval estimate for the
single value to the population being estimated, using the
parameter being sample drawn.
estimated, using the Usually, the interval estimates
sample drawn. constructed by this process comes with
a confidence coefficient and hence they
are called as confidence intervals.
TERMINOLOGY • Population and Sample
IN • Sampling and sampling design
IS
• Sampling distribution
RELATED TO
ESTIMATION • Parameter and Statistic
• Estimator, Estimate and Estimation
• Point Estimate and Interval estimate
• Confidence level and non-confidence level
• Critical value
• Standard error and Margin of error
 • The sample drawn, is used to estimate population mean (μ) and
the market fluctuation from the center, which is the population
TO variance ().
ESTIMATE • Sample mean is used to estimate the population mean and
THE KEY sample variance () is used to estimate the population variance.
PARAMETER • In general, any unknown constant of the population is known as
S OF THE parameter.
POPULATION • Any sample quantity, usually called as statistic, which is used to
estimate the parameter is called as an estimator.
• A value of the estimator that indicates the position of the
population parameter, for a particular sample is called as an
estimate.
• Estimation is a process of estimating the parameters of the
population.
 ESTIMATORS

• The sample mean, , is the most common estimator of the population mean, 
• The sample variance, s2, is the most common estimator of the population
variance, 2.
• The sample standard deviation, s, is the most common estimator of the
population standard deviation, .
• The sample proportion, , is the most common estimator of the population
proportion, p.
ESTIMATORS
TESTING OF
HYPOTHESIS
TERMINOLOG • Hypothesis
Y IN
• Null hypothesis and Alternative hypothesis
IS
RELATED TO • Type-1 and Type-2 errors
HYPOTHESIS • Level of significance
TESTING
• Confidence Coefficient
• Test Statistic
• P-value
• Significant or insignificant
• Power of the test