Population parameter

Indian Economy glossary

Also called: Parameter · Topic: Economic Data: Census, NSS, Surveys and Statistical Tools · NCERT: Class 11, Ch 2 "Collection of Data"

Meaning

A population parameter is the true value of some feature of the whole population. The population here means every unit being studied. Average income, the share of literate people and the total output are all parameters. We rarely know a parameter exactly, because measuring every unit costs too much. So we study a sample and use its estimate as a stand-in for the parameter.

Example

Five farmers in Manipur earn Rs 500, 550, 600, 650 and 700. Their true average income is 3000 ÷ 5 = Rs 600, and this is the parameter. A sample of just two farmers (500 and 600) gives an estimate of Rs 550.

Don't confuse with

  • Sample estimate: this is worked out from a part of the population, so it changes from sample to sample. The parameter is one fixed true value.
  • Sampling error: this is the gap between the two. Sampling error = parameter − estimate, which is 600 − 550 = 50 in the example.

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