Estimation of Population Parameters

The estimation of population parameters discussed here is limited to the case of estimating the mean of a population for numerical data and estimating the proportion of a population for categorical data. The population mean (µ) is estimated by the sample mean (x̅ or x-bar) ± MOE (margin of error). The population proportion (p) is estimated by the sample proportion (p̂) ± MOE.

A simple illustration is in the case of estimating the pH level of bottled drinking water. According to Indonesian National Standard No. SNI 01-3553-2006-AMDK, the pH level must meet the value of 6 to 8.5. Suppose we want to estimate the average pH of a specific brand of bottled water. We can take a random sample of that product with a certain sample size, test the pH of each sample, and then calculate the average. The results are then adjusted by the margin of error to obtain a confidence interval for the estimated population mean pH for that brand at a certain level of confidence. To understand this estimation concept, we first need to grasp the Central Limit Theorem and the concept of confidence level.

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