Estimation

Estimates can similarly be generated by projecting results from polls or surveys onto the entire population.

Such a projection, intended to pick the single value that is believed to be closest to the actual value, is called a point estimate.

[2] For example, if one were asked to estimate the percentage of people who like candy, it would clearly be correct that the number falls between zero and one hundred percent.

[2] Such an estimate would provide no guidance, however, to somebody who is trying to determine how many candies to buy for a party to be attended by a hundred people.

In mathematics, approximation describes the process of finding estimates in the form of upper or lower bounds for a quantity that cannot readily be evaluated precisely, and approximation theory deals with finding simpler functions that are close to some complicated function and that can provide useful estimates.

Estimation is important in business and economics because too many variables exist to figure out how large-scale activities will develop.

The exact number of candies in this jar cannot be determined by looking at it, because most of the candies are not visible. It can be estimated by assuming that the density of the unseen candies is the same as that of the visible candies.