T-statistic vs Z-statistic
A common rule of thumb is that for a sample containing more than 50 observations, we use the z-table instead of the t-table.
However, let's suppose that we have a sample of more than 50 observations, and the population variance is unknown. Should we use the t-statistic in this case?
Thanks
1 answers ( 0 marked as helpful)
Hi Mohamed, As you have learned the z-distribution assumes that the population standard deviation is known. On the other hand, the t-distribution is based on the sample standard deviation. When you have more than 50 observations you can use the z-distribution because the sample starts to approximate the population distribution close enough.
Hope this helps!
Best,
Ned