Parameter, Sample Statistic, and Frequency Distribution

Earlier we took an example of measuring the average savings for a group of 100 families. This data of 100 families represents the population. The properties of a population such as mean and standard deviation are called parameters.

Instead if we wanted to measure the average savings of an entire country, we would take a sample and then use that sample whose characteristics will be used to represent the entire population. These properties of sample are not called parameters, but sample statistics.

The statistical data that we collect can be presented in the form of a frequency distribution. A frequency distribution refers to summarizing a large data set into a small number of intervals.

Let’s take an example to understand how to construct a frequency distribution. Let’s say we have the following 20 observations with us.

11.5, 2.5, 3, 2.3, 4.3, 5.6