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Estimated Standard Errors: T Statistics and Z Scores

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Can you explain why using the t statistic may be an appropriate alternative to using a z-score? If so, please explain the concept of estimated standard error to justify your answer.

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Solution Summary

The solution discusses why using the t statistic may be an appropriate alternative to using a z-score and then explains concept of estimated standard error.

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In statistics, we use the t statistic instead of using a z-score under two conditions: 1. the sample size is too small, so we do not the know the distribution of sample. 2. We know that the data has normal distribution but the standard deviation of population is not known.

For the first condition, in most textbooks, we have a general rule: if the sample size is less than 30, we need to use t distribution. If the sample ...

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