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Chapter Seven
Confidence Intervals

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McGraw-Hill/Irwin

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Confidence Intervals
7.1

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Large Sample Confidence Intervals for a

Population Mean
7.2 Small Sample Confidence Intervals for a
Population Mean
7.3 Sample Size Determination
7.4 Confidence Intervals for a Population
Proportion
7.5* Confidence Intervals for Parameters of Finite
Populations
7.6* An Introduction to Survey Sampling
7.7* A Comparison of Confidence Intervals and
Tolerance Intervals

7.1 Large Sample Confidence

Intervals for a Mean
If the sampled population is normal or the sample size is large (n
30), a )100% confidence interval for is

x z/2

If is unknown and the sample size is large (n 30), estimate by the

sample standard deviation s and a
)100% confidence
interval for is

x z/2
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s
n

Example: Large Sample Confidence

Interval for Mean
Example 7.1: Gas Mileage Case
95% Confidence Interval

x z 0.025

s
0.7992
31.5531 1.960
n
49
31.5531 0.2238 [31.33, 31.78]

99% Confidence Interval

x z 0.005

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s
0.7992
31.5531 2.575
n
49
31.5531 0.2940 [31.26, 31.85]

Three 95.44Confidence Intervals for

Gas Mileage Example

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The Effect of on Confidence

Interval Width

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7.2 Small Sample Confidence

Intervals for a Mean
If the sampled population is normally distributed with mean , then a
)100% confidence interval for is

x t /2

s
n

t /2is the t point giving a right-hand tail area of /2 under the t curve

having n 1 degrees of freedom.

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Example: Small Sample Confidence

Interval for Mean
Example 7.4: Debt-to-Equity Ratios

x t 0.025

s
0.1921
1.3433 2.145
n
15

1.3433 0.1064 [1.2369, 1.4497]

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Effect of Degrees of Freedom on the

t-distribution

As the number of degrees of freedom increases, the spread

of the t distribution decreases and the t curve approaches
the standard normal curve.
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7.3 Sample Size Determination

A sample size

z /2
n=

B
will yield an estimate of
confidence.

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, precise
x to within B units of , with 100(1-)

7.4 Confidence Intervals for a

Population Proportion
p and n(1 p ) both 5]
If the sample size n is[nlarge
, then a )100% confidence
interval for p is

p z/2

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p (1 p )
n 1

Example: Confidence Interval for a

Proportion
Example 7.8: Phe-Mycin side effects
35
p =
=.175
200
p z/2

p (1 p )
(0.175)(0.825)
0.175 1.960
n 1
200 1
0.175 0.053 [0.122, 0.228]

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Determining Sample Size for

Confidence Interval for p
A sample size

z/2
n = p(1 - p)

will yield an estimatep , precise to within B units of

p, with 100(1-) confidence.
Note that the formula requires a preliminary
estimate of p. The conservative value of p = 0.5 is
generally used when there is no prior information
on p.
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*7.5 Confidence Intervals for Population

Mean and Total for a Finite Population
For a large (n 30) random sample of measurements selected
without replacement from a population of size N, a )100%
confidence interval for is

x z/ 2

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s
n

N-n
N

A )100% confidence interval for the

population total is found by multiplying the lower
and upper limits of the corresponding interval for
by N.

Confidence Intervals for Proportion of and

Total Number of Units when Sampling a
Finite Population
For a large random sample of measurements selected without
replacement from a population of size N, a
)100%
confidence interval for p is

p z/2

p(1 - p) N - n

n -1 N

A )100% confidence interval for the total number of

units in a category is found by multiplying the lower and
upper limits of the corresponding interval for p by N.
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*7.6 An Introduction to Survey

Sampling
Alternatives to Simple Random Sampling
Stratified Random Sampling
Simple random samples from nonoverlapping subpopulations or strata.
Cluster Sampling
Random samples of clusters of units.
Systematic Sampling
1-in-L samples
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*7.7 A Comparison of Confidence

Intervals and Tolerance Intervals

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Summary: Selecting an Appropriate

Confidence Interval for a Population
Mean

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Confidence Intervals
Summary
: Large Sample Confidence Intervals for a
7.1
Population Mean
7.2 Small Sample Confidence Intervals for a
Population Mean
7.3 Sample Size Determination
7.4 Confidence Intervals for a Population Proportion
7.5* Confidence Intervals for Parameters of Finite
Populations
7.6* An Introduction to Survey Sampling
7.7* A Comparison of Confidence Intervals and
Tolerance Intervals
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