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Chapter 8 Review

This chapter discusses confidence interval estimation. It introduces the estimation process and properties of point estimates. It then explains how to compute confidence intervals for the population mean when the standard deviation is both known and unknown. It also covers computing confidence intervals for the population proportion. Key factors that affect the width of confidence intervals are the data dispersion, sample size, and confidence level. Examples are provided for each type of confidence interval.

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147 views

Chapter 8 Review

This chapter discusses confidence interval estimation. It introduces the estimation process and properties of point estimates. It then explains how to compute confidence intervals for the population mean when the standard deviation is both known and unknown. It also covers computing confidence intervals for the population proportion. Key factors that affect the width of confidence intervals are the data dispersion, sample size, and confidence level. Examples are provided for each type of confidence interval.

Uploaded by

api-3829767
Copyright
© Attribution Non-Commercial (BY-NC)
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Download as DOC, PDF, TXT or read online on Scribd
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Chapter 8

Confidence Interval Estimation


Chapter Topics

• State Estimation Process


• Introduce Properties of Point Estimates
• Explain Confidence Interval Estimates
• Compute Confidence Interval Estimation for Population Mean
( known and unknown)
• Compute Confidence Interval Estimation for Population
Proportion
• Compute Sample Size
Statistical Methods

Statistical
Methods

Descriptive Inferential
Statistics Statistics

Hypothesis
Estimation
Testing
Inference Process

Estimates Population
& Tests

Sample
Statistics
X, Ps Sample

Population Parameters Are Estimated with Point Estimator


Estimate Population with Sample
Parameter... Statistic
Mean µ X
Proportion p ps
2
Variance σ2 s
Differences µ1 − µ2 X1 − X 2

Confidence Interval Estimation Process

I am 95%
Population Random Sample confident
that µ is
Mean
Mean, µ, is between
unknown X = 50
40 & 60.

Confidence Interval Estimates


Provide range of values
– Takes into consideration variation in sample statistics from
sample to sample
– Is based on observation from one sample
– Gives information about closeness to unknown population
parameters
– Is stated in terms of level of confidence
Never 100% certain
Elements of Confidence Interval Estimation

A Probability That the Population Parameter


Falls Somewhere Within the Interval.
Sample
Confidence Interval Statistic

Confidence Confidence
Limit (Lower) Limit (Upper)
Confidence Intervals

X ± Z ⋅σ X = X ± Z ⋅ σ
n
σx_

X
µ − 2.58⋅σ X µ −1.645⋅σ X µ µ +1.645⋅σ X µ + 2.58⋅σ X
µ −1.96⋅σ X µ +1.96⋅σ X
90% Samples
95% Samples
99% Samples
Level of Confidence
• Probability that the unknown population parameter falls within
the interval
• Denoted (1 - =% )α level of confidence
α Is Probability That the Parameter Is Not Within the Interval
• The typical values are 99%, 95%, 90%. Corresponding Z values
are 2.58, 1.96, 1.645 (for two side problems).
Experiment: throw 2 dice, use mean ±2 to construct a 94.5%
confidence interval estimate for µ.
Interval and Level of Confidence

Sampling Distribution of the Mean


σX
µ − Zα / 2σ X α /2 µ + Zα / 2σ X
1−α α /2

Intervals X
extend from µX = µ
( 1 − α ) 100%
X − Zσ X of intervals
constructed
to contain µ ; α
X + Zσ X 100% do not.

Confidence Intervals
Factors Affecting Interval Width
1. Data Dispersion
Measured by σ
2. Sample Size

X  / n
3. Level of Confidence (1 - α)
Affects Z

Confidence Interval Estimates

Confidence
Intervals

Mean Proportion

σ Known σ Unknown

Confidence Interval Estimate For Mean (σ Known)


Assumptions
– Population standard deviation (σ) is known
– Population is normally distributed
– If not normal, can be approximated by normal distribution
(n ≥ 30)
Confidence Interval Estimate

σ σ
X − Zα / 2 ⋅ ≤ µ ≤ X + Zα / 2 ⋅
n n
Example :
Population is normally distributed with σ = 10. The mean of a random
sample of n = 25 is X = 50. Set up a 95% confidence interval estimate
for µ.

X − Zα ⋅ σ ≤ µ ≤ X + Zα ⋅ σ
2 n 2 n

50−1.96⋅ 10 ≤ µ ≤ 50+1.96⋅ 10
25 25
46.08 ≤ µ ≤ 53.92
Confidence Interval Estimate Mean (σ Unknown)
Assumptions
Population Standard Deviation (σ) Is Unknown
Population Must Be Normally Distributed
Use Student’s t Distribution
Confidence Interval Estimate:

S S
X − t α / 2, n −1 ⋅ ≤ µ ≤ X + t α / 2, n −1 ⋅
n n

Student’s t Table
Assume: n = 3
α/2 df = n - 1 = 2
Upper Tail Area α = .10
df .25 .10 α/2 =.05
.05
1 1.000 3.078 6.314

2 0.817 1.886 2.920 α/2 =.05

3 0.765 1.638 2.353


0 2.920 t
t Values
Confidence Interval Estimate for Proportion
Assumptions
Two categorical outcomes
Population follows binomial distribution
Normal approximation can be used if
n·p ≥ 5 and n·(1 - p) ≥ 5
Confidence interval estimate:

pS ( 1 − pS ) pS ( 1 − pS )
p S − Zα / 2 ≤ p ≤ pS + Zα / 2
n n
Example:
A random sample of 400 voters showed 32 preferred candidate A. Set
up a 95% confidence interval estimate for p.
Ps = 32/400 = .08
ps ⋅ (1 − ps ) ps ⋅ (1 − ps )
ps − Z α / 2 ⋅ ≤ p ≤ ps + Z α / 2 ⋅
n n
.08 ⋅ (1−.08 ) .08 ⋅ (1−.08)
.08 − 196
. ⋅ ≤ p ≤ .08 + 196
. ⋅
400 400
.053 ≤ p ≤ .107

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