Issue # 2: Accuracy of Statistics
Size is
the important issue, but it is not the only consideration in statistical
analysis. Also of interest to analysts is the accuracy of the statistic,
which reflects on its trustworthiness and the extent to which you
can draw certain conclusions.
To understand the issue
of accuracy, let us start by returning to the simple average. In the
previous example we said that the mean spend by our customers was
$1,500. We would call this a point estimate, that is, a statistic
that has a single value.
Is the point estimate of $1,500 the only issue for you as an analyst or manager? No – because, from this single point estimate, we cannot gauge how accurately the average represents all our customers. Let’s examine ...
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