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Suppose, you need to evaluate the total number of males aged 30 in a city. Suppose 1 crore people are located  in the same city & the task is to calculate the average height . 

How you can do this?

• The most obvious approach is to simply calculate the average.
• First, measure the height of all, males aged 30. Add their heights.
• Divide the total sum of heights with the total number of males aged 30.
• However reaching to & measuring the height of all  is an uphill task.
• Is there an alternative to this?

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The number of claims an Insurance company will receive in next month from a portfolio is to be estimated.

The number of claims is discrete and hence a discrete random variable is assumed. 

For future occurrence of events we will consider a Poisson distribution.

P(X=x) = (ⅇ^(-λ) λ^x)/x! 

We will only be able to find the 

Probabilities and forecast for

Future if λ is known.

So, we need to estimate λ

from the sample 

So how to estimate λ??

Point Estimation: Population mean=Sample mean

Details in Video.

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