CAS PS 211 Lecture Notes - Lecture 3: Standard Deviation, Normal Distribution, Statistical Significance
15 Sep 2016
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Document Summary
Can be observed in a bell-shaped distribution, which is so typical that it is called a normal curve. It is important to be able to infer that an observed difference accurately estimates the true difference. In order to do this, the reliability and significance of the differences must be examined. In deciding when it is safe to generalize from a sample, three basic principles are involved: Representative samples are better than biased samples. Less-variable observations are more reliable than those that are more variable. Generalizations based on a few unrepresentative cases are unreliable. When averages from two samples are each reliable measures of their respective populations, then their difference is likely to be reliable. Also, when the difference between the sample averages is large, it is more likely that the difference between them reflects a real difference in their populations. When sample averages are reliable, and when the difference between them is relatively large, the difference has statistical significance.
