Chapter 11: Estimation

How much do employees typically earn, and how uncertain is our estimate?

Use a sample statistic to estimate a population parameter.

Learning Goals

• Use nearest-method percentiles and ordinary medians correctly.
• Resample n observations with replacement; collect one statistic each time.
• Build an interval from bootstrap statistics and explain its coverage.

Chapter Flow

• Percentiles: summarize ordered observations; choose a convention.
• Bootstrap: original sample → B resamples → B statistics.
• Confidence intervals: central 95% uses percentiles 2.5 and 97.5.

What To Watch For

• n versus B: more resamples stabilize endpoints; more representative observations add information.
• Statistic versus observation: an interval for mean order value does not describe the range of 95% of orders.
• Coverage: repeat the whole sampling process to assess the method.

Carry Forward

• Define the population, statistic, units, and sampling assumptions.
• Check endpoint stability; bootstrap coverage is approximate.
• A value inside an interval is not proven correct.
• Resampling cannot repair bias or recover missing extremes.