Looking to Benchmark Pay?
Example of inference
If we wish to determine which of three varieties of stock option plans is most popular in U.S. companies, we gather information. If we gathered all the information on U.S. companies we would never finish. So, we consider collecting a sample.
The procedure of statistical inference introduces order into our attempt to draw conclusions from evidence provided by samples. The logic of the procedure dictates some of the conditions under which the evidence may be collected, and statistical tests determine how large the observed differences must be before we can have confidence that they represent real differences in the larger group from which only a few events have been sampled.
Memory Jogger
In Human Resources administration, statistical inference is concerned with:
- estimation of population parameters
- tests of hypotheses
- inferring properties of an unknown distribution from data generated from that distribution