Confidence Intervals

Elementary Statistics
Larson Farber
Chapter
6

Ch. 6 Larson/Farber
2
Estimating Parameters
Hypothesis Testing
Inferential Statistics-the branch
of statistics that uses sample
statistics to make inferences
about population parameters.
Inferential Statistics
Applications of Inferential Statistics

Ch. 6 Larson/Farber
3
Point Estimate
DEFINITION:
A point estimate is a
single value estimate
for a population
parameter. The best
point estimate of the
population mean is
the sample mean .
x

Ch. 6 Larson/Farber
4
Example:
Point Estimate
A random sample of airfare prices (in
dollars) for a one-way ticket from Atlanta
to Chicago. Find a point estimate for the
population mean, .
99 102 105 105 104 95 100 114 108 103
094 105 101 109 103 98 96 98 104 87
101 106 103 90 107 98 101 107 105 94
111 104 87 117 101
The sample mean is

77 . 101
35
3562
= =
E
=
n
x
x
The point estimate for the price of all
one way tickets from Atlanta to Chicago
is $101.77.

Ch. 6 Larson/Farber
5
Interval Estimates
An interval estimate is an interval, or range of
values used to estimate a population parameter

101.77
Point estimate
(
)

101.77
The level of confidence, c is
the probability that the
interval estimate contains the
population parameter

6
0
z
Sampling distribution
x
For c =0.95
0.95
0.025 0.025
95% of all sample means will have
standard scores between z = -1.96
and z = 1. 96
Distribution of Sample
Means
When the sample size is at least 30, the
sampling distribution for is normal
x
-1.96 1.96

7
Maximum Error of
Estimate
DEFINITION
Given a level of confidence, c, the maximum error
of estimate E is the greatest possible distance
between the point estimate and the value of the
parameter it is estimating.
When n > 30, the sample standard deviation, s can
be used in place of o.


n
z z E
c
x
c
o
o = =
Find E, the maximum error of estimate for
the one-way plane fare from Atlanta to
Chicago for a 95% level of confidence given s
= 6.69
Using z
c
=1.96, s = 6.69 and n = 35,
22 . 2
35
69 . 6
96 . 1 = = =
n
z E
c
o
You are 95% confident that the maximum error
of estimate is $2.22

8
Definition
A c-confidence interval for the population mean is




E x E x + < <
Confidence Intervals for
Find the 95% confidence interval for the one-way
plane fare from Atlanta to Chicago.
You found = 101.77 and E = 2.22
x
99.55 < < 103.99

101.77
( )
Left endpoint

55 . 99 22 . 2 77 . 101 = = E x
99.55
Right endpoint
99 . 103 22 . 2 77 . 101 = + = + E x
103.99
With 95% confidence, you can say the
mean one-way fare from Atlanta to
Chicago is between $99.55 and $103.99

Ch. 6 Larson/Farber
9
Sample Size
Given a c-confidence level and an maximum
error of estimate, E, the minimum sample size n,
needed to estimate , the population mean is
2
|
.
|

\
|
=
E
z
n
c
o
You want to estimate the mean one-way fare
from Atlanta to Chicago. How many fares must
be included in your sample if you want to be 95%
confident that the sample mean is within $2 of the
population mean?
98 . 42
2
69 . 6 96 . 1
2
2
=
|
.
|

\
|

=
|
.
|

\
|
=
E
z
n
c
o
You should include at least 43 fares in your
sample. Since you already have 35, you need 8
more.

10
0
t
n =13
d.f.=12
c=90%
.90
The t-distribution
-1.782 1.782
The critical value for t is 1.782. 90% of
the sample means with n = 12 will lie
between t = -1.782 and t = 1.782
.05
.05
Sampling distribution
x
If the distribution of a random variable, x is
normal and n < 30, then the sampling
distribution of is a t-distribution with n-1
degrees of freedom.
x

11
Confidence Interval
Small Sample
In a random sample of 13 American adults, the
mean waste recycled per person per day was 4.3
pounds and the standard deviation was 0.3 pound.
Assume the variable is normally distributed and
construct a 90% confidence interval for .
1. The point estimate is x=4.3 pounds
2. The maximum error of
estimate is
148 . 0
13
3 . 0
782 . 1 = = =
n
s
t E
c
n
s
t E
c
=
Maximum error of estimate
4.15 < < 4.45

4.3
(
Left endpoint

152 . 4 148 . 0 3 . 4 = = E x
4.152
)
Right endpoint
448 . 4 148 . 0 3 . 4 = + = + E x
4.448
With 90% confidence, you can say the mean
waste recycled per person per day is between
4.15 and 4.45 pounds.

Ch. 6 Larson/Farber
12
Confidence Intervals for
Population Proportions
The point estimate for p, the population
proportion of successes is given by the proportion
of successes in a sample
n

x
p =
The maximum error of estimate, E for a c-
confidence interval is:
n
q p
z E
c

=
A c-confidence interval for the
population proportion, p is
E p p E p + < <

p q

=
q
is the point estimate for the
proportion of failures where
If np > 5 and nq > 5 , the sampling distribution for is
normal.
p

Ch. 6 Larson/Farber
13
Confidence Interval for p
In a study of 1907 fatal traffic accidents, 449
were alcohol related. Construct a 99% confidence
interval for the proportion of fatal traffic accidents
that are alcohol related.
1. The point estimate for p is
235 . 0
1907
449
n

= = =
x
p
765 . 0 235 . 0 1

= = q
2. 1907(.235) >5 and 1907(.765) >5, so the sampling
distribution is normal.
3.
025 . 0
1907
) 765 )(. 235 (.
575 . 2

= = =
n
q p
z E
c
0.21 < p < 0.26
(
Left endpoint

21 . 0 025 . 0 235 . 0 = = E p
.21

.235
)
26 . 0 025 . 0 235 . 0 = + = + E p
Right endpoint

.26
With 99% confidence, you can say the proportion of
fatal accidents that are alcohol related is between
21% and 26%.

14
If you have a preliminary estimate
for p and q the minimum sample
size given a c-confidence interval
and a maximum error of estimate
needed to estimate p is
^ ^
Minimum Sample Size
If you do not have a preliminary
estimate, use 0.5 for p and 0.5 for q .
^
^
|
.
|

\
|
=
E
z
q p n
c


15
You wish to estimate the proportion of
fatal accidents that are alcohol related at a
99% level of confidence. Find the minimum
sample size needed to be be accurate to within
2% of the population proportion.
14 . 4414
02 . 0
575 . 2
) 5 . 0 )( 5 . 0 (
2
=
|
.
|

\
|
You will need at least 4415 for your sample.
b) Using a preliminary estimate of p = 0.235,
find the minimum sample size required.
05 . 2980
02 . 0
575 . 2
) 765 . 0 )( 235 . 0 (
2
=
|
.
|

\
|
= n
With a preliminary sample you need at least n =2981
for your sample.
Example: Minimum Sample Size
With no preliminary estimate, use 0.5 for p and q.
^
^
|
.
|

\
|
=
E
z
q p n
c

=

16
0 10 20 30 40
The Chi-Square Distribution
The point estimate for o
2
is s
2
and the point
estimate for o is s.
If the sample size is n, use a chi-square _
2
distribution
with n-1 d.f. to form a c-confidence interval.
When the sample size is 17, there are 16 d.f.
Find _
R
2
the right- tail critical value and _
L
2
the left-tail critical value for c = 95% and n = 17.
Area to the right of _
R
2
is (1- 0.95)/2 = 0.025 and
area to the right of _
L
2
is (1+ 0.95)/2 = 0.975
_
R
2

=28.845

_
L
2

=6.908

6.908

28.845

.95

17
2
2
2
2
2
) 1 ( ) 1 (
L R
s n s n
_
o
_

< <

Confidence Intervals for o

2
and o
You randomly select and record the
prices of 17 CD players. The sample
standard deviation is $150. Construct a
95% confidence interval for o
2


and o.
A c-confidence interval for a population variance is:
To estimate the standard deviation take the square
root of each endpoint.
908 . 6
150 ) 1 17 (
845 . 28
150 ) 1 17 (
2
2
2

< <

o
12480.50 < o
2
< 52113.49
Find the square root of each endpoint
$117.72 < o < $228.28
You can say with 95% confidence that
2
is between
12480.50 and 52113.49 and is between $117.72 and
$228.28.