Answer to Question #226595 in Statistics and Probability for Sudharani

Question

Explain efficiency and Suffecency.

Answer 1

Efficiency is a measure of quality of an estimator of an experimental design or of a hypothesis testing procedure. It's also a the ratio of the theoretically minimal variance to the actual variance of the estimator. It ranges from 0 to 1.

Sufficiency refers to how well an estimator utilizes the information in the sample relative to the postulated statistical model. Sufficiency is an important quality in the hypothesis testing where we are effectively comparing the distribution under null hypothesis with actually observed distribution