( 2 marks) What is the Method of Moments for finding estimates of parameters of probability distributions?
Method of moments is an estimation procedure to get the estimate of the population parameters by expressing population moments as a function of parameters and equating them with the sample moments. Mathematically it can be written as
Suppose the problem is to estimate for the random variable X having distribution . Suppose the first k moments be expressed as a function of as
Let the sample moments based on n samples be given by
Then the method of moment estimator for is computed based on equating
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