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Mathematics

Sufficient Statistics and the Rao-Blackwell Theorem

Quick fact

The Rao-Blackwell theorem guarantees that you can always improve an unbiased estimator—without adding bias—by averaging it over all datasets that produce the same sufficient statistic. This sometimes transforms a crude guess into the best possible unbiased estimator, with the minimal variance.

Why this is interesting

Imagine you have a raw dataset with thousands of numbers, but you only need a simple summary to estimate a population parameter. Could that summary retain all the statistical information? And could it even help you build a better estimator?