The Statistical Imagination

Chapter 8. Parameter Estimation

Using Confidence Intervals

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Confidence Intervals (CI)

A range of possible values of a
parameter expressed with a
specific degree of confidence
Confidence interval = point
estimate error term
2008 McGraw-Hill

With a Confidence
Interval (CI):
We take a point estimate and use knowledge
about sampling distributions to project an interval
of error around it
A CI provides an interval estimate of an unknown
population parameter and precisely expresses the
confidence we have that the parameter falls within
that interval
Answers the question: What is the value of a
population parameter, give or take a little known
sampling error?
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The Level of Confidence

The level of confidence is a
calculated degree of confidence that
a statistical procedure conducted with
sample data will produce a correct
result for the sampled population

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The Level of Significance ()

The level of significance is the difference
between the stated level of confidence and
perfect confidence of 100%
This is also called the level of expected
error
The Greek letter alpha () is used to
symbolize the level of significance

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Confidence and Significance

The level of confidence and the level of
significance are inversely related as one
increases, the other decreases
The level of confidence plus the level of
significance sum to 100%. E.g., a level of
confidence of 95% has a level of
significance of 5%, or a proportion of .05

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The Critical Z-score

We choose a desired level of confidence
by selecting a critical Z-score from the
normal distribution table
This critical score fits the normal curve
and isolates the area of the level of
confidence and significance
Use the symbol, Z, for critical scores
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Commonly Used
Critical Z-scores
For a 95% CI of the mean, when n >
121, the critical Z-score = 1.96 SE
For a 99% CI of the mean, when n >
121, the critical Z-score = 2.58 SE
For a CI of the mean, when n < 121,
the critical value is found in a tdistribution table with df = n 1 (See
Chapter 10.)
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Steps for Computing

Confidence Intervals
Step 1. State the research question; draw a
conceptual diagram depicting givens (e.g.,
Figure 8-1 in the text);
Step 2. Compute the standard error and the
error term
Step 3. Compute the LCL and UCL of the CI
Step 4. Provide an interpretation in everyday
language
Step 5. Provide a statistical interpretation
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When to Calculate a CI
of a Population Mean
The research question calls for
estimating the population parameter X
The variable of interest (X) is of
interval/ratio level
There is a single representative
sample from one population
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The Error Term

The error term of the CI is calculated
by multiplying a standard error by a
critical Z-score
For a CI of the mean, the standard
error is the standard deviation divided
by the square root of n
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Upper and Lower

Confidence Limits
The upper confidence limit (UCL)
provides an estimate of the highest
value we think the parameter could
have
The lower confidence limit (LCL)
provides an estimate of the lowest
value we think the parameter could
have
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Calculating the
Confidence Limits
UCL = sample mean + the error term
LCL = sample mean the error term

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Interpretation in
Everyday Language
Without technical language, this is a
statement of the findings for a public
audience
We state that we are confident to a
certain degree (e.g., 95%) that the
population parameter falls between
the limits of our confidence interval
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The Statistical Interpretation

The statistical interpretation illustrates the
notion of "confidence in the procedure"
used to calculate the confidence interval
E.g., for the 95% level of confidence we
state: If the same sampling and statistical
procedures are conducted 100 times, 95
times the true population parameter will be
encompassed in the computed intervals
and 5 times it will not. Thus, I have 95%
confidence that this single CI I computed
includes the true parameter
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Some Things to Note

About a CI of the Mean
Typically, the sample standard deviation is
used to estimate the standard error (SE)
The error term = SE times Z . A large error
term results when either SE or Z is large
The interval reported is an estimate of the
population mean, not an estimate of the
range of X-scores
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Level of Confidence and

Degree of Precision
The greater the stated level of confidence,
the less precise the confidence interval
The larger the sample size, the more
precise the confidence interval
To obtain a high degree of precision and a
high level of confidence a researcher must
use a sufficiently large sample
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Confidence Interval of a
Population Proportion
With a nominal/ordinal variable, a
confidence interval provides an
estimate within a range of error of the
proportion of a population that falls in
the success category of the variable

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When to Calculate a CI of a
Population Proportion
We are to provide an interval estimate of the
value of a population parameter, P ,
where P = p [of the success category] of a
nominal/ordinal variable
There is a single representative sample
from one population
The sample size is sufficiently large that
(psmaller) (n) > 5, resulting in a sampling
distribution that is approximately normal
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Choosing a Sample Size

To obtain a high degree of precision and a
high level of confidence a researcher must
use a sufficiently large sample
Sample size can be chosen to fit a desired
level of confidence and range of error
The formula for choosing n involves solving
for n in the error term of the confidence
interval equation
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Statistical Follies
Scrutinize reports of survey and poll
results. Even a major news network
may misreport results
Often confusion centers around the
error term
It is plus and minus the error term

2008 McGraw-Hill