Question

Explain the method of maximum likelihood for estimating the value of a population parameter.

08 Feb 2018
Answer :
Word Count : 1158

The method of maximum likelihood corresponds to many well-known estimation methods in statistics. For example, one may be interested in the heights of adult female penguins, but be unable to measure the height of every single penguin in a population due to cost or time constraints. Assuming that the heights are normally distributed with some unknown mean and variance, the mean and variance can be estimated with MLE while only knowing the heights of some sample of the overall population. MLE would accomplish this by taking the mean and variance as parameters and finding particular parametric values that make the observed results the most probable given the model.

In general, for a fixed set of data and underlying statistical model, the method of maximum likelihood selects the set of values of the model parameters that maximizes the likelihood function. Intuitively, this maximizes the "agreement" of the selected model with the observed data, and for discrete random variables it indeed maximizes the probability of the observed data under the resulting distribution. Maximum likelihood estimation gives a unified approach to estimation, which is well-defined in the case of the normal distribution and many other problems.

Suppose there is a sample x1, x2, …, xn of n independent and identically distributed observations, coming from a distribution with an unknown probability density function f0(·). It is however surmised that the function f0 belongs to a certain family of distributions{ f(·| θ), θ ∈ Θ } (where θ is a vector of parameters for this family), called the parametric model,

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