Estimating Parameters and

Determining Sample Sizes

7−1 Estimating a Population Proportion
7−2 Estimating a Population Mean
7−3 Estimating a Population Standard Deviation or
Variance
7−4 Bootstrapping: Using Technology for Estimates

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 Key Concept
This section presents methods for using a sample proportion
to make an inference about the value of the corresponding
population proportion. Here are the three main concepts
included in this section:

• Confidence Interval: We can use a sample proportion to

construct a confidence interval estimate of the true value of a
population proportion.
• Sample Size: We should know how to find the sample size
necessary to estimate a population proportion.

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 Confidence Interval for Estimating a
Population Proportion p: Notation

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 Point Estimate

An unbiased estimator is a statistic that targets the

value of the corresponding population parameter in the
sense that the sampling distribution of the statistic has
a mean that is equal to the corresponding population
parameter.

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 Point Estimate
• Point Estimate

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 Confidence Interval
• Confidence Interval
– A confidence interval (or interval estimate) is a
range (or an interval) of values used to estimate the
true value of a population parameter. A confidence
interval is sometimes abbreviated as CI.
• Confidence Level
– The confidence level is the probability 1 − α
(such as 0.95, or 95%) that the confidence interval
actually does contain the population parameter,
assuming that the estimation process is repeated
a large number of times. (The confidence level is
also called the degree of confidence, or the
confidence coefficient.)
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 Interpreting a Confidence Interval (1 of 3)
We must be careful to interpret confidence intervals
correctly. There is a correct interpretation and many
different and creative incorrect interpretations of the
confidence interval 0.405 < p < 0.455.
Correct: “We are 95% confident that the interval from
0.405 to 0.455 actually does contain the true value of
the population proportion p.”
Wrong: “There is a 95% chance that the true value of p
will fall between 0.405 and 0.455.”
Wrong: “95% of sample proportions will fall between
0.405 and 0.455.”
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 The Process Success Rate
A confidence level of 95% tells us that the process we
are using should, in the long run, result in confidence
interval limits that contain the true population proportion
95% of the time.

Confidence Interval from

20 Different Samples

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 Relationship Between Confidence
Level and α
The following table shows the relationship between the
confidence level and the corresponding value of α. The
confidence level of 95% is the value used most often.

Most Common Confidence

Corresponding Values of α
Levels
90% (or 0.90) confidence level: α = 0.10
95% (or 0.95) confidence level: α = 0.05
99% (or 0.99) confidence level: α = 0.01

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 Critical Values
• Critical Values
– A critical value is the number
on the borderline separating
sample statistics that are
significantly high or low from
those that are not significant.

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 Common Critical Values

This is the most common critical value, and it is listed

with two other common values in the table that follows.

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 Margin of Error

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 Margin of Error for Proportions
Formula

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 Confidence Interval for Estimating a Population
Proportion p: Confidence Interval Estimate of p

The confidence interval is often expressed in the

following formats:

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 Confidence Interval for Estimating a
Population Proportion p: Requirements
1. The sample is a simple random sample.
2. The conditions for the binomial distribution are
satisfied: There is a fixed number of trials, the trials
are independent, there are two categories of
outcomes, and the probabilities remain constant for
each trial.
3. There are at least 5 successes and at least 5 failures.

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 Procedure for Constructing a
Confidence Interval for p
1. Verify that the requirements in the preceding slides
are satisfied.
2. StatCrunch: Stat  Proportion Stats  One Sample
 With Summary. (Input number of successes,
number of observations, and confidence level.)
3. Write a correct interpretation: “I am ___% confident
that the true population proportion of ____ is
between ___ and ____.

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 Width and Margin of Error (E) of a
Confidence Interval
• Width = Upper Confidence Limit – Lower Confidence Limit

• E (Margin of Error) = Upper Confidence limit – point estimate

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 Example: Constructing a Confidence
Interval: Poll Results
A Gallup poll of 1487 adults showed that 639 of the
respondents have Facebook pages.
a. Find the point estimate
b. Find the 95% confidence interval estimate of the
population proportion p.
c. Find the margin of error E that corresponds to a 95%
confidence level.
d. Based on the results, can we safely conclude that fewer
than 50% of adults have Facebook pages? Assuming that
you are a newspaper reporter, write a brief statement that
accurately describes the results and includes all of the
relevant information.
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 Example: Constructing a Confidence
Interval: Poll Results
Requirement Check
(1) The polling methods used by the Gallup organization result in samples
that can be considered to be simple random samples.
(2) The conditions for a binomial experiment are satisfied because there is
a fixed number of trials (1487), the trials are independent (because the
response from one person doesn’t affect the probability of the response
from another person), there are two categories of outcome (subject has a
Facebook page or does not), and the probability remains constant, because
P(having a Facebook page) is fixed for a given point in time.
(3) The number with Facebook pages is 639 (or 43% of 1487). If 639 of the
1487 subjects have Facebook pages, the other 848 do not, so the number
of successes (639) and the number of failures (848) are both at least 5.
The check of requirements has been successfully completed.

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 Example: Constructing a Confidence
Interval: Poll Results
Summary of results
a) The point estimate is .4297
b) Here is one statement that for the confidence
interval: I am 95% confident the true population of
adult facebook users is between .4046 and .4549
people.
c) The Margin of Error is .0252
d) Because the whole inteval is below .50 we can
safely conclude (with only 5% error) that less than
50% of adults use facebook.

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 Analyzing Polls
When analyzing results from polls, consider the
following:
1. The sample should be a simple random sample, not
an inappropriate sample.
2. The confidence level should be provided.
3. The sample size should be provided.
4. Except for relatively rare cases, the quality of the poll
results depends on the sampling method and the
size of the sample, but the size of the population is
usually not a factor.

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Example: Constructing a Confidence Interval
Professor Pfaff opened up a fun size bags of M&Ms. He
found there were 6 blue M&Ms and 10 that were not blue.

a. Find the point estimate for the proportion of blue M&Ms

b. Find the 95% confidence interval estimate of the
population proportion p of blue M&Ms.
c. Find the margin of error E that corresponds to a 95%
confidence level.
d. Repeat parts b and c for a 90% confidence interval.
What happens when you are reduce your confidence?
e. Professor Pfaff opened up a second fun size bag of
M&Ms and now has 8 blue and 23 that were not blue.
Repeat parts a, b, and c. What happens when you
increase your sample size?

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 Example: Constructing a Confidence
Interval
Requirement Check
(1) Assume packs of M&Ms are simple random samples
(2) The conditions for a binomial experiment are satisfied because there is
a fixed number of trials (16), there are two categories of outcome (blue
M&M or not), and the probability remains constant, because P(getting a
blue M&M) is fixed for a given point in time.
(3) There are at least 5 successes (6 blue) and 5 failures (10 not blue)
The check of requirements has been successfully completed.

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 Example: Constructing a Confidence
Interval
Summary of results
a) The point estimate is .375
b) I am 95% confident the true population of blue
M&Ms is between .1378 and .6122.
c) The Margin of Error is .2372
d) I am 90% confident the true population of blue
M&Ms is between .1210 and .5741. The Margin of
Error is .1991.
e) The point estimate is .2581. I am 95% confident
the true population of blue M&Ms is between .1040
and .4121. The Margin of Error is .1541.
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 Finding the Point Estimate and E
from a Confidence Interval
Point estimate of p:

Margin of error:

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 Determining Sample Size: Finding the Sample
Size Required to Estimate a Population
Proportion: Requirements
The sample must be a simple random sample of
independent sample units.

If you don’t have an estimate use .5 for and

If the computed sample size n is not a whole number,
round the value of n up to the next larger whole number,
so the sample size is sufficient instead of being slightly
insufficient. StatCrunch will automatically do this for you.
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 Determining Sample Size: Finding the Sample
Size Required to Estimate a Population
Proportion: Objective
Finding the Sample Size Required to Estimate a
Population Proportion
StatCrunch: Stat  Proportion Stats  One Sample 
Width/Sample Size
Input: Confidence level, Target Proportion (if not
given leave as 0.5), and width as twice the margin
of error

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 Example: What Percentage of Adults
Make Online Purchases?
When the author was conducting research for this chapter,
he could find no information about the percentage of adults
who make online purchases, yet that information is
extremely important to online stores as well as brick and
mortar stores. If the author were to conduct his own survey,
how many adults must be surveyed in order to be 95%
confident that the sample percentage is in error by no more
than three percentage points?
a. Assume that a recent poll showed that 80% of adults
make online purchases.
b. Assume that we have no prior information suggesting a
possible value of the population proportion.
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 Example: What Percentage of Adults
Make Online Purchases?
Interpretation
To be 95% confident that our sample percentage is
within three percentage points of the true percentage for
all adults, we should obtain a simple random sample of
1068 adults, assuming no prior knowledge. By
comparing this result to the sample size of 683 found in
part (a), we can see that if we have no knowledge of a
prior study, a larger sample is required to achieve the

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