Four of the most common ways to find an estimate are
:
- The Method of Moments: is based on the law of
large numbers and uses relatively simple equations to find point
estimates. Is often not too accurate and has a tendency to be
biased.
- Maximum Likelihood: uses a model (for example,
the normal distribution) and uses the values in the model to
maximize a likelihood function. This results in the most likely
parameter for the inputs selected.
- Bayes Estimators: minimize the average risk
(an expectation of random variables).
- Best Unbiased Estimators: several unbiased
estimators can be used to approximate a parameter.