8.3 Parameters and Statistics
The word 'Parameters' is associated with the population and it is understood as the measure of the characteristics of the population, such as mean and standard deviation etc.
The word 'Statistics' is used for a random sample and it is understood as the measure of the characteristics of the random sample, such as mean and standard deviation etc.
Note : Different symbols are used to denote
parameters and statistics.
Inferential or inductive statistics helps us in making an educated guess about the population parameters based on the statistics of its random sample.
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For instance, say
Aim to know: The average (mean) income of families living in the area "Park avenue" in the year 1997-1998. i.e. The population parameter m
Work out this way: Draw a random sample of 200 families and compute their mean
income. i.e. the statistic of sample x say $ 120000.
Conclusion (or inference): The population mean (parameter) is close to sample mean
(statistic)i.e. mean income of the families living in the area 'Park Avenue' is $ 120000.