Question

what is the concept of statistical inference? discuss the key factor in inference and why it is important.

Answer 1

Statistical inference is making conclusions about a population parameter of interest based on our sample. In general in the real world, the sample size would be extremely large so we will not be able to calculate the population parameter. However we will make statistical inferences about it using hypothesis testing.

Example, before launching a new medicine in the real world , the researchers need to test whether it has a significant effect and it is not harmful. To do this they conduct tests on a sample similar to the population being targeted and then at the given level of significance they conclude whether it is effective or not based on the results of the test statistic obtained from the sample.

So here the two key factors are population parameter and sample statistic which is important in determining whether our test is statistically significant.