The Challenge of Unknown Population Variance
In Unit 6, we performed z-tests for proportions. The standard error used the parameter (known under ).
Problem: In practice, we rarely know the population standard deviation .
But using (a random variable) instead of (a fixed constant) introduces extra uncertainty. This extra uncertainty means the standardized statistic no longer follows the standard normal distribution .
Instead, it follows the t-distribution — a family of symmetric distributions with heavier tails than normal.