# What is Inferential Statistics?

Definition: Inferential statistics is a statistical method that deduces from a small but representative sample the characteristics of a bigger population. In other words, it allows the researcher to make assumptions about a wider group, using a smaller portion of that group as a guideline.

## What Does Inferential Statistics Mean?

Inferential statistics is one of the two statistical methods employed to analyze data, along with descriptive statistics. The goal of this tool is to provide measurements that can describe the overall population of a research project by studying a smaller sample of it.

This way the researcher can make assumptions about key elements with a fair degree of confidence. Among these inferential tools we have regression models, normal distributions and R-squared analysis, among others. The study of the smaller sample can be used to explain the variable’s overall behavior from a whole-population perspective which opens the path for theories and new hypothesis. In business, inferential statistics are widely used.

One of the most common places we can find this method is at forecasting models. These statistical models study a small portion of data to predict the future behavior of the variables, making inferences based on historical data.

## Example

A company called Pizza Palace Co. is currently performing a market research about their customer’s behavior when it comes to eating pizza. The company is trying to understand the favorite tastes of its customers in order to re-design the menu. They hired a marketing consulting company to gather a focus group to study the matter. The company gathered a group of 50 people of different ages and genders, all residents of neighborhoods adjacent to where the store is located.

After the focus group was finished the marketing company proceeded to apply inferential statistics to this sample, in order to understand what would be the most desired tastes of the total population. The results revealed that 75% of the sample loved pepperoni pizza; also, they discovered that 75% of women in the group liked their pizza with some pineapple on it.

By applying inferential statistic’s tools to the study, the company could understand with a high degree of confidence which were the favorite tastes of the population they currently serve.

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