In this article we will define and discuss how to calculate point estimate. Point estimation, in statistics, the process of finding an approximate value of some parameter such as the average of a population from random samples of the population.
Often point estimates are used as parts of other statistical calculations. For instance, a point estimate of the standard deviation is used in the calculation of a confidence interval for μ.
Some of the factors that give credibility to the estimator include;
- Consistent. Here you want the sample size to be large so that the value of the estimator is more accurate.
- Unbiased. You expect the values of the estimators of samples you might draw from the population to be as close as possible to the true value of the population parameter.
Formula to Calculate Point Estimate.
Simply, any statistic can be a point estimate. A statistic is an estimator of some parameter in a population. For instance:
Find the sample mean if the sample ages of 4 employees out of 10 is 21 years, 24 years, 26 years and 28 years.
Therefore, the point estimate is 24.75 years.