4.4 - Estimation and Confidence Intervals

Two common estimation methods are point and interval estimates.

Point Estimates
An estimate for a parameter that is one numerical value. An example of a point estimate is the sample mean or the sample proportion.
Interval Estimates
An estimate for a parameter that is an interval as the estimate for a parameter.

This is a new concept that is the focus of this lesson. Such intervals are built around point estimates which is why understanding point estimates is important to understanding interval estimates.

In this course, the interval estimates we find are referred to as confidence intervals.

Confidence Interval
Interval of values computed from sample data that is likely to cover the true parameter of interest.

There are many estimators for population parameters. For example, if we want to know the "center" of a distribution, why use the mean? Could we use the median? How about using the middle value, i.e. (max+min)/2? We choose particular estimators for various reasons with information based on their sampling distributions. Here are some properties of "good" estimators.