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Statistics for Economics, Second Edition by Shahdad Naghshpour

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CHAPTER 6

Point and Interval Estimation

Estimation versus Inference

There are two applications of statistics: descriptive and inferential. Descriptive statistics summarize data in forms of tables, graphs, or computed values and are used for estimation. We can use descriptive statistics to describe population data or sample data. Inferential statistics is used to draw conclusions about a population parameter using sample statistics—they are used to make decisions. Obtaining sample statistics for inferential statistics is the same as obtaining them for descriptive statistics. Whether or not a statistic is considered to be descriptive or inferential depends on its use. The statistics obtained from a sample are called estimates, to emphasize the ...

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