Statistical induction financial definition of Statistical induction
statistical inference (redirected from Statistical induction)
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A statistical method of drawing conclusions on unknown properties of a population based on a random sampling of data from that population.
statistical inference a process by which we infer conclusions about a statistical POPULATION from which only a SAMPLE has been drawn. For example, if one million Britons buy bicycles each year, and 200 are asked why they do so, 50% may say because it helps to keep them fit. From this sample one may infer that 50% of the total population of one million Britons buying bicycles do so for this reason. However, it is not possible to say with 100% accuracy that this is the case unless the views of all one million were obtained. Nevertheless, it is possible to say with reasonable confidence that the estimation of 50% is correct for the whole population.