5/21/2015

EstimationWikipedia,thefreeencyclopedia

Estimation
FromWikipedia,thefreeencyclopedia

Estimation(orestimating)istheprocessoffindinganestimate,or
approximation,whichisavaluethatisusableforsomepurpose
evenifinputdatamaybeincomplete,uncertain,orunstable.The
valueisnonethelessusablebecauseitisderivedfromthebest
informationavailable.[1]Typically,estimationinvolves"usingthe
valueofastatisticderivedfromasampletoestimatethevalueofa
correspondingpopulationparameter".[2]Thesampleprovides
informationthatcanbeprojected,throughvariousformalor
informalprocesses,todeterminearangemostlikelytodescribethe
missinginformation.Anestimatethatturnsouttobeincorrectwill
beanoverestimateiftheestimateexceededtheactualresult,[3]and
anunderestimateiftheestimatefellshortoftheactualresult.[4]

Contents
1Howestimationisdone
2Usesofestimation
3Seealso
4References
5Externallinks

Howestimationisdone

Theexactnumberofcandiesinthis
jarcannotbedeterminedbylooking
atit,becausemostofthecandiesare
notvisible.Theamountcanbe
estimatedbypresumingthatthe
portionofthejarthatcannotbeseen
containsanamountequivalenttothe
amountcontainedinthesamevolume
fortheportionthatcanbeseen.

Estimationisoftendonebysampling,whichiscountingasmall
numberofexamplessomething,andprojectingthatnumberontoa
largerpopulation.[1]Anexampleofestimationwouldbedetermininghowmanycandiesofagivensizeare
inaglassjar.Becausethedistributionofcandiesinsidethejarmayvary,theobservercancountthenumber
ofcandiesvisiblethroughtheglass,considerthesizeofthejar,andpresumethatasimilardistributioncan
befoundinthepartsthatcannotbeseen,therebymakinganestimateofthetotalnumberofcandiesthat
couldbeinthejarifthatpresumptionweretrue.Estimatescansimilarlybegeneratedbyprojectingresults
frompollsorsurveysontotheentirepopulation.
Inmakinganestimate,thegoalisoftenmostusefultogeneratearangeofpossibleoutcomesthatisprecise
enoughtobeuseful,butnotsoprecisethatitislikelytobeinaccurate.[2]Forexample,intryingtoguessthe
numberofcandiesinthejar,iffiftywerevisible,andthetotalvolumeofthejarseemedtobeabouttwenty
timesaslargeasthevolumecontainingthevisiblecandies,thenonemightsimplyprojectthattherewerea
thousandcandiesinthejar.Suchaprojection,intendedtopickthesinglevaluethatisbelievedtobeclosest
totheactualvalue,iscalledapointestimate.[2]However,apointestimationislikelytobeincorrect,
becausethesamplesizeinthiscase,thenumberofcandiesthatarevisibleistoosmallanumbertobe
http://en.wikipedia.org/wiki/Estimation

1/3

5/21/2015

EstimationWikipedia,thefreeencyclopedia

surethatitdoesnotcontainanomaliesthatdifferfromthepopulationasawhole.[2]Acorresponding
conceptisanintervalestimate,whichcapturesamuchlargerrangeofpossibilities,butistoobroadtobe
useful.[2]Forexample,ifonewereaskedtoestimatethepercentageofpeoplewholikecandy,itwould
clearlybecorrectthatthenumberfallsbetweenzeroandonehundredpercent.[2]Suchanestimatewould
providenoguidance,however,tosomebodywhoistryingtodeterminehowmanycandiestobuyfora
partytobeattendedbyahundredpeople.

Usesofestimation
Inmathematics,approximationdescribestheprocessoffindingestimatesintheformofupperorlower
boundsforaquantitythatcannotreadilybeevaluatedprecisely,andapproximationtheorydealswith
findingsimplerfunctionsthatareclosetosomecomplicatedfunctionandthatcanprovideusefulestimates.
Instatistics,anestimatoristheformalnamefortherulebywhichanestimateiscalculatedfromdata,and
estimationtheorydealswithfindingestimateswithgoodproperties.Thisprocessisusedinsignal
processing,forapproximatinganunobservedsignalonthebasisofanobservedsignalcontainingnoise.For
estimationofyettobeobservedquantities,forecastingandpredictionareapplied.AFermiproblem,in
physics,isoneconcerningestimationinproblemswhichtypicallyinvolvemakingjustifiedguessesabout
quantitiesthatseemimpossibletocomputegivenlimitedavailableinformation.
Estimationisimportantinbusinessandeconomics,becausetoomanyvariablesexisttofigureouthow
largescaleactivitieswilldevelop.Estimationinprojectplanningcanbeparticularlysignificant,because
plansforthedistributionoflaborandforpurchasesofrawmaterialsmustbemade,despitetheinabilityto
knoweverypossibleproblemthatmaycomeup.Acertainamountofresourceswillbeavailablefor
carryingoutaparticularproject,makingitimportanttoobtainorgenerateacostestimateasoneofthevital
elementsofenteringintotheproject.[5]TheU.S.GovernmentAccountabilityOfficedefinesacostestimate
as,"thesummationofindividualcostelements,usingestablishedmethodsandvaliddata,toestimatethe
futurecostsofaprogram,basedonwhatisknowntoday",andreportsthat"realisticcostestimatingwas
imperativewhenmakingwisedecisionsinacquiringnewsystems".[6]Furthermore,projectplansmustnot
underestimatetheneedsoftheproject,whichcanresultindelayswhileunmetneedsarefulfilled,normust
theygreatlyoverestimatetheneedsoftheproject,orelsetheunneededresourcesmaygotowaste.
Aninformalestimatewhenlittleinformationisavailableiscalledaguesstimate,becausetheinquiry
becomesclosertopurelyguessingtheanswer.The"estimated"sign,,isusedtodesignatethatpackage
contentsareclosetothenominalcontents.

Seealso
Ansatz
Ballparkestimate
Backoftheenvelopecalculation
Conjecture
Costestimation
Estimationstatistics
Estimationtheory
Kalmanfilter
Salesquote
Upperandlowerbounds
http://en.wikipedia.org/wiki/Estimation

2/3

5/21/2015

EstimationWikipedia,thefreeencyclopedia

References
1. C.LonEnloe,ElizabethGarnett,JonathanMiles,PhysicalScience:WhattheTechnologyProfessionalNeedsto
Know(2000),p.47.
2. RaymondA.Kent,"Estimation",DataConstructionandDataAnalysisforSurveyResearch(2001),p.157.
3. JamesTate,JohnSchoonbeck,ReviewingMathematics(2003),page27:"Anoverestimateisanestimateyou
knowisgreaterthantheexactanswer".
4. JamesTate,JohnSchoonbeck,ReviewingMathematics(2003),page27:"Anunderestimateisanestimateyou
knowislessthantheexactanswer".
5. AGuidetotheProjectManagementBodyofKnowledge(PMBOKGuide)ThirdEdition,AnAmericanNational
Standard,ANSI/PMI990012004,ProjectManagementInstitute,Inc,2004,ISBN193069945X.
6. GAOCostEstimatingandAssessmentGuide,BestPracticesforDevelopingandManagingCapitalProgram
Costs,GAO093SP,UnitedStatesGovernmentAccountabityOffice,March2009,Prefacep.i.

Externallinks
Estimationchapterfrom"AppliedSoftwareProject
Management"(PDF)(http://www.stellman
greene.com/aspm/images/ch03.pdf)
Retrievedfrom"http://en.wikipedia.org/w/index.php?
title=Estimation&oldid=660506681"

Lookupestimationin
Wiktionary,thefree
dictionary.
Wikiquotehasquotations
relatedto:Estimates

Categories: Estimationtheory
Thispagewaslastmodifiedon2May2015,at22:54.
TextisavailableundertheCreativeCommonsAttributionShareAlikeLicenseadditionaltermsmay
apply.Byusingthissite,youagreetotheTermsofUseandPrivacyPolicy.Wikipediaisa
registeredtrademarkoftheWikimediaFoundation,Inc.,anonprofitorganization.

http://en.wikipedia.org/wiki/Estimation

3/3