Illustrating the method of Inference


Illustrating the method of Inference

Concept:

In statistics, statistical inference is the process of drawing conclusions from data that are subject to random variation, for example, observational errors or sampling variation.[1] More substantially, the terms statistical inference,statistical induction and inferential statistics are used to describe systems of procedures that can be used to draw conclusions from datasets arising from systems affected by random variation,[2] such as observational errors, random sampling, or random experimentation.[1] Initial requirements of such a system of procedures for inference and induction are that the system should produce reasonable answers when applied to well-defined situations and that it should be general enough to be applied across a range of situations. Inferential statistics are used to test hypotheses and make estimations using sample data.
The outcome of statistical inference may be an answer to the question "what should be done next?", where this might be a decision about making further experiments or surveys, or about drawing a conclusion before implementing some organizational or governmental policy.
The conclusion of a statistical inference is a statistical proposition. Some common forms of statistical proposition are:
·        an estimate; i.e., a particular value that best approximates some parameter of interest,
·        confidence interval (or set estimate); i.e., an interval constructed using a dataset drawn from a population so that, under repeated sampling of such datasets, such intervals would contain the true parameter value with the probabilityat the stated confidence level,
·        credible interval; i.e., a set of values containing, for example, 95% of posterior belief,
·        rejection of a hypothesis[3]
·        clustering or classification of data points into groups

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