There is a very simple and fundamental concept- to much of probability
and statistics that can be conveyed using the following problem.
PROBLEM. Assume a finite set (universe) of N units where A of the units
have a particular attribute. The value of N is known while the value of
A is unknown. If a proper subset (sample) of size n is selected randomly
and a of the units in the subset are observed to have the particular
attribute, what can be said about the unknown value of A? The problem is
not new and almost anyone can describe several situations where a
particular problem could be presented in this setting. Some recent
references with different focuses include Cochran (1977); Williams
(1978); Hajek (1981); Stuart (1984); Cassel, Samdal, and Wretman (1977);
and Johnson and Kotz (1977). We focus on confidence interval estimation
of A. Several methods for exact confidence interval estimation of A
exist (Buonaccorsi, 1987, and Peskun, 1990), and this volume presents
the theory and an extensive Table for one of them. One of the important
contributions in Neyman (1934) is a discussion of the meaning of
confidence interval estimation and its relationship with hypothesis
testing which we will call the Neyman Approach. In Chapter 3 and
following Neyman's Approach for simple random sampling (without
replacement), we present an elementary development of exact confidence
interval estimation of A as a response to the specific problem cited
above.