Sample & Population/ Sample Statistics and Population Parameter

Population is unknown. So the values of Population parameters are also unknown. Population Parameters are attributes related to the population. µ, σ² and ρ are population parameters for mean, variance and correlation. Due to time constraints and monetary constraints it is impossible to study each and every unit of population and hence know these values.

Sample is known. Sample statistic is known. Sample Statistics are attributes related to the sample. Sample mean, Sample variance & Sample correlation are sample statistics. For a particular sample these statistics will take a known value.

We are trying to estimate the Unknown Population Parameter from a known value of a Sample Statistics.

The core of Statistics lies in estimating these unknown population parameters with (known) sample statistics.

We want the sample estimates to be as close as possible to the unknown value of population parameters.

Based on these sample values, we predict an interval within which this unknown population parameter lies. This is done with a certain probability level, also called level of confidence.