Point Estimate of Mean and Standard Deviation?

Published December 10, 2010

Question by Sully!: Point Estimate of Mean and Standard Deviation?
i cant figure this out the numbers i get are too small?? The question is :
Many drugs used to treat cancer are expensive. The cost per treatment of Herceptin, a drug used to treat breast cancer is the following simple sample of 10 people
$ 4,376.00
$ 5,578.00
$ 2,717.00
$ 4,920.00
$ 4,495.00
$ 4,798.00
$ 6,446.00
$ 4,119.00
$ 4,237.00
$ 3,814.00
and it ask
a) Develop a point estimate of the mean cost per treatment with Herceptin?
b) Develop a point estimate of the standard deviation of the cost per treatment with Herceptin?
The numbers i get are too small i think any help would me AMAZING! Thanks!!!

Best answer:

Answer by hhype
The question is simply asking for the mean (average) cost/treatment and the standard deviation. Point estimate refers to the fact that you are giving a single average, rather than an average and confidence limits around that average.

a.) mean cost:
(I assume you mean arithmetic mean, or average)
I don’ know if you are allowed to use Microsoft Excell to do your work, but given this list of data that is what I would do. The alternative is to add the ten values and divide by 10.
mean cost = $ 4,550.00 mean cost per treatment

b) standard deviation:
I would still use Microsoft Excell since you already have the data in a list there.
stdev = $ 952.29

The formulae for average and standard deviation are in the wikipedia links below. Perhaps you will need to show your work.

What do you think? Answer below!