Point and Interval

Estimation
Point estimation is the process of finding a single
value, from a random sample of the population to
approximate a population parameter.
A point estimator is needed to obtain a point
estimate. It is assumed that the population is
normally distributed when the sample mean is
used as a point estimate of the population mean.
The sample mean is the point estimate of the
population mean and is the point estimate of
population variance .
Confidence level
- refers to the probability that the confidence
interval contains the true population parameter.
- is equal to (1-

Alpha ( – is the probability that the confidence interval

does not contain the true population parameter.
- corresponds to the level of significance.
3 Confidence Levels

1.95% level of confidence

2.90%
3.99%
95% level of confidence
Interval Estimate of Population Mean with Known Variance
T- Distribution
T- Distribution
- is just like the standard normal curve.
- is a bell-shaped and unimodal.
- Its variance is greater than 1. (wider and fatter)

If sample size becomes larger, the t-distribution gets

closer to the standard normal distribution.
t- statistics – uses the sample deviation
especially when the population
variance is unknown.
= n < 30 (sample size)

z- statistics – uses the value of the

population variance.
= n 30
𝜶
=𝒐𝒏𝒆 𝒕𝒂𝒊𝒍
𝟐

𝜶=𝒕𝒘𝒐 𝒕𝒂𝒊𝒍𝒔