Chapter 4

Estimating Population Values

 Chapter Goals

After completing this chapter, learners

should be able to:
 Distinguish between a point estimate and a confidence
interval estimate
 Construct and interpret a confidence interval estimate
for a single population mean using both the z and t
distributions
 Determine the required sample size to estimate a single
population mean within a specified margin of error
 Form and interpret a confidence interval estimate for a
single population proportion
 Point and Interval Estimates

 A point estimate is a single number,

 a confidence interval provides additional
information about variability

Lower Upper
Confidence Confidence
Point Estimate
Limit Limit

Width of
confidence interval
Point Estimates

We can estimate a with a Sample

Population Parameter … Statistic
(a Point Estimate)

Mean μ x
Proportion p p
 Confidence Intervals
?
Population Parameter: 

Sampling Inference

Estimation
Sample Statistic:

 Sample mean is the best estimate of 

• However, we realize that the sample mean is probably not
exactly equal to population mean, and that we would get a
different value of the sample mean in another sample
• Solution is to use our sample mean as the center of
an entire interval of likely values for our population
mean 
 Sampling Distribution of Sample Mean

 Distribution of values taken by statistic in all possible

samples of size n from the same population
 Assume: observations are independent and sampled
from a population with mean  and variance 2
Sample 1 of size n
Sample 2 of size n
Sample 3 of size n Distribution
Population Sample 4 of size n of these
Sample 5 of size n values?
Parameters: Sample 6 of size n
 and 2
Sample 7 of size n
Sample 8 of size n
.
.
.
6
 SE – Standard Error
For a value that is sampled
and in normal distribution,
the proportion of samples
would fall between 0, 1, 2,
and 3 standard deviations
above and below the
actual value as depicted
above.
The sample mean is the estimator of a population mean.
However, different samples drawn from that same population
would in general have different values of the sample mean.

=> the standard error of the mean is used to describe;

 Confidence Intervals

 How much uncertainty is associated

with a point estimate of a population
parameter?
 An interval estimate provides more
information about a population
characteristic than does a point
estimate
 Such interval estimates are called
confidence intervals
Confidence Interval Estimate

 An interval gives a range of values:

◦ Takes into consideration variation in
sample statistics from sample to sample
◦ Based on observation from 1 sample
◦ Gives information about closeness to
unknown population parameters
◦ Stated in terms of level of confidence
 Never 100% sure
 Estimation Process

Random Sample I am 95%

confident that
μ is between
Population Mean 40 & 60.
(mean, μ, is x = 50
unknown)

Sample
 General Formula

 The general formula for all

confidence intervals is:

Point Estimate  (Critical Value)(Standard Error)

Confidence Level

 Confidence Level
◦ Confidence in which the
interval will contain the
unknown population
parameter
A percentage (less than 100%)
 Question

 You work for a company that makes smart

TVs, and your boss asks you to determine
with certainty the exact life of a smart TV.
She tells you to take a random sample of
100 TVs.

 What is the exact life of a smart TV made

by this company?
Sample Evidence:
n = 100
X̅ = 11.50 years
s = 2.50 years

Estimation 13
 The Better Answer

n = 100
X̅ = 11.50 years
S = 2.50 years

at 95% confidence:
11.50 ± 1.96*(2.50/√100)
11.50 ± 1.96*(.25)
11.50 ± .49
The 95% CIE is: 11.01 years ---- 11.99 years
[Note: Ideally we should be using σ but since n is large we assume that
s is close to the true population standard deviation.]

Estimation 14
 The Better Answer - Interpretation

 We are 95% confident that the interval from

11.01 years to 11.99 years contains the true
population parameter, μ.
 Another way to put this is, in 95 out of 100
samples, the population mean would lie in
intervals constructed by the same procedure
(same n and same α).
 Remember – the population parameter (μ ) is
fixed, it is not a random variable. Thus, it is
incorrect to say that there is a 95% chance
that the population mean will “fall” in this
interval.

Estimation 15
Confidence Level, (1-)
(continued)
 Suppose confidence level = 95%
 Also written (1 - ) = .95
 A relative frequency interpretation:
◦ In the long run, 95% of all the confidence
intervals that can be constructed will
contain the unknown true parameter
 A specific interval either will contain or
will not contain the true parameter
◦ No probability involved in a specific interval
Confidence Intervals

Confidence
Intervals

Population Population
Mean Proportion

σ Known σ Unknown
Confidence Interval for μ
(σ Known)

 Assumptions
◦ Population standard deviation σ is known
◦ Population is normally distributed
◦ If population is not normal, use large
sample
 Confidence interval estimate

σ
x  z α/2
n
 Finding the Critical Value

 z α/2  1.96
Consider a 95% confidence interval:
1   .95

α α
 .025  .025
2 2

z units: z.025= -1.96 0 z.025= 1.96

Lower Upper
x units: Confidence Point Estimate Confidence
Limit Limit
 Common Levels of Confidence

 Commonly used confidence levels

are 90%, 95%, and 99%
Confidence
Confidence z value,
Coefficient,
Level
1  z/2
80% .80 1.28
90% .90 1.645
95% .95 1.96
98% .98 2.33
99% .99 2.58
99.8% .998 3.08
99.9% .999 3.27
 Interval and Level of Confidence

Sampling Distribution of the Mean

/2 1  /2
x
Intervals μx  μ
extend from x1
σ x2 100(1-)%
x  z /2 of intervals
n
to constructed
σ contain μ;
x  z /2
n 100% do not.
Confidence Intervals
 Margin of Error

 Margin of Error (e): the amount added

and subtracted to the point estimate to
form the confidence interval

Example: Margin of error for estimating μ, σ known:

σ σ
x  z /2 e  z /2
n n
 Factors Affecting Margin of Error

σ
e  z /2
n
 Data variation, σ : e as σ

 Sample size, n : e as n

 Level of confidence, 1 -  : e if 1 - 
 Example

 A sample of 11 circuits from a large

normal population has a mean
resistance of 2.20 ohms. We know
from past testing that the population
standard deviation is .35 ohms.

 Determine a 95% confidence interval

for the true mean resistance of the
population.
 Example
(continued)
 A sample of 11 circuits from a large
normal population has a mean
resistance of 2.20 ohms. We know from
past testing that the population standard
deviation is .35 ohms.
σ
 Solution: x  z /2
n

 2.20  1.96 (.35/ 11)

 2.20  .2068
1.9932 .......... ..... 2.4068
 Interpretation

 We are 95% confident that the true mean

resistance is between 1.9932 and 2.4068
ohms
 Although the true mean may or may not be in
this interval, 95% of intervals formed in this
manner will contain the true mean

 An incorrect interpretation is that there is 95% probability

that this interval contains the true population mean.
(This interval either does or does not contain the true mean,
there is no probability for a single interval)
Confidence Intervals

Confidence
Intervals

Population Population
Mean Proportion

σ Known σ Unknown
 Confidence Interval for μ
(σ Unknown)

 If
the population standard deviation
σ is unknown, we can substitute
the sample standard deviation, s
 Thisintroduces extra uncertainty,
since s is variable from sample to
sample

C
 So we use the t distribution instead
h
a
p
of the normal distribution
7-
2
8
 Confidence Interval for μ
(σ Unknown)
(continued)

 Assumptions
◦ Population standard deviation is unknown
◦ Population is normally distributed
◦ If population is not normal, use large sample
 Use Student’s t Distribution
 Confidence Interval Estimate

s
x  t /2
n
 Student’s t Distribution

 The t is a family of distributions

 The t value depends on degrees of
freedom (d.f.)
◦ Number of observations that are free to vary
after sample mean has been calculated

d.f. = n - 1
Degrees of Freedom (df)

Idea: Number of observations that are free to vary

after sample mean has been calculated
Example: Suppose the mean of 3 numbers is 8.0

Let x1 = 7
Let x2 = 8
What is x3? If the mean of these three
values is 8.0,
then x3 must be 9
(i.e., x3 is not free to vary)
Here, n = 3, so degrees of freedom = n -1 = 3 – 1 = 2
(2 values can be any numbers, but the third is not free to vary
for a given mean)
 Student’s t Distribution

Note: t z as n increases

Standard
Normal
(t with df = )

t (df = 13)
t-distributions are bell-
shaped and symmetric, but
have ‘fatter’ tails than the t (df = 5)
normal

0 t
 Student’s t Table

Upper Tail Area

Let: n = 3
df .25 .10 .05 df = n - 1 = 2
 = .10
1 1.000 3.078 6.314 /2 =.05

2 0.817 1.886 2.920

3 0.765 1.638 2.353 /2 = .05

The body of the table

contains t values, not 0 2.920 t
probabilities
 t distribution values
With comparison to the z value

Confidence t t t z
Level (10 d.f.) (20 d.f.) (30 d.f.) ____

.80 1.372 1.325 1.310 1.28

.90 1.812 1.725 1.697 1.64
.95 2.228 2.086 2.042 1.96
.99 3.169 2.845 2.750 2.58

Note: t z as n increases
Example

A random sample of n = 25 has x = 50 and

s = 8. Form a 95% confidence interval for μ
◦ d.f. = n – 1 = 24, so
t /2 , n1  t.025,24  2.0639
The confidence interval is

s 8
x  t /2  50  (2.0639)
n 25
46.698 …………….. 53.302
Approximation for Large Samples

 Since t approaches z as the sample size

increases, an approximation is
sometimes used when n  30:

Correct Approximation
formula for large n

s s
x  t /2 x  z /2
n n
 Determining Sample Size

 The required sample size can be found

to reach a desired margin of error (e)
and level of confidence (1 - )

◦ Required sample size, σ known:

2
σ  z /2 σ 
2 2
z
n /2
 
 e 
2
e
 Required Sample Size Example

If  = 45, what sample size is needed to

be 90% confident of being correct within
± 5?

2 2
 z /2 σ   1.645(45) 
n     219.19
 e   5 

So the required sample size is n = 220

(Always round up)

Confidence Intervals for the
Population Proportion, p

 An interval estimate for the

population proportion ( p ) can be
calculated by adding an allowance
for uncertainty to the sample
proportion ( p )
Confidence Intervals for the
Population Proportion, p
(continued)

 Recall that the distribution of the sample

proportion is approximately normal if
the sample size is large, with standard
deviation
p(1  p)
σp 
n

 We will estimate this with sample data:

p(1  p)
sp 
n
 Confidence interval endpoints
 Upper and lower confidence limits for the
population proportion are calculated with
the formula
p(1  p)
p  z /2
n
 where
◦ z is the standard normal value for the level of confidence
desired
◦ p is the sample proportion
◦ n is the sample size
Example

 A random sample of 100 people

shows that 25 are left-handed.
 Form a 95% confidence interval
for the true proportion of left-
handers
 Example
(continued)
 A random sample of 100 people
shows that 25 are left-handed. Form
a 95% confidence interval for the
true proportion of left-handers.
1. p  25/100  .25

2. Sp  p(1  p)/n  .25(.75)/n  .0433

3. .25  1.96 (.0433)

0.1651 . . . . . 0.3349
 Interpretation

 We are 95% confident that the true

percentage of left-handers in the
population is between
16.51% and 33.49%.

 Although this range may or may not

contain the true proportion, 95% of
intervals formed from samples of size
100 in this manner will contain the
true proportion.
Changing the sample size

 Increases in the sample size

reduce the width of the
confidence interval.
Example:
◦ If the sample size in the above example
is doubled to 200, and if 50 are left-
handed in the sample, then the interval
is still centered at .25, but the width
shrinks to
.19 …… .31
Finding the Required Sample Size
for proportion problems

Define the p(1  p)

margin of error: e  z/2
n

z 2
p (1  p)
Solve for n: n /2
2
e
p can be estimated with a pilot sample, if
necessary (or conservatively use p = .50)
 What sample size...?

 How large a sample would be necessary

to estimate the true proportion defective
in a large population within 3%, with
95% confidence?
(Assume a pilot sample yields p = .12)
 What sample size...?
(continued)

Solution:
For 95% confidence, use Z = 1.96
E = .03
p = .12, so use this to estimate p

z2 /2 p (1  p) (1.96) 2 (.12)(1  .12)

n 2
 2
 450.74
e (.03)
So use n = 451
 Key Points

 Once you are working with a sample, not the

entire population, you cannot be 100% certain
of population parameters. If you need to know
the value of a parameter certainty, take a
census.
 The more confidence you want to have in the
estimator, the larger the interval is going to be.
 Traditionally, statisticians work with 95%
confidence. However, you should be able to use
the Z-table to construct a CIE at any level of
confidence.

Estimation 49
Chapter Summary

 Illustrated estimation process

 Discussed point estimates
 Introduced interval estimates
 Discussed confidence interval
estimation for the mean (σ known)
 Addressed determining sample size
 Discussed confidence interval
estimation for the mean (σ unknown)
 Discussed confidence interval
estimation for the proportion
 Exercises

7.3. Determine the 90% confidence interval

estimate for the population mean
a. Mean = 102.36, n = 17, σ = 1.26
b. Mean = 56.33, n = 21, s = 22.4

7.4. Determine the 95% confidence interval

estimate for the population mean of a
normal distribution
a. Mean = 13.56, n = 300, σ = 12.6
b. Mean = 2.45, n = 31, s = 22.3
 Exercises

7.9 Given the following data from a simple random

sample for the population of interest, compute the
95% confidence interval estimate (What assumption
must be made about the population?)
114 97 107 101 84 84 85 66 108 76

7.10 The following data were collected in a simple

random sample from a normally distributed
population. Construct a 90% confidence interval
estimate for the population mean.
11 14 10 12 11 11 12 12 15
 Exercises

7.12 Presto Pizza delivers pizzas throungout its local market

area at no charge to the customer. However, customers
often tip the driver. The woner is interested in estimating the
mean tip income per delivery . To do this, she has selected a
simple random sample of 12 deliveries and has recorded the
tips that were received by the drivers. These data are.
2.25 2.5 2.25 2 2 1.5 0 2 1.5 2 3 1.5

 Base on these sample data, what is the best point estimate

to use as an estimate of the true mean tip per delivery?
 Suppose the owner is interested in developing a 90%
confidence interval estimate. Given the fact that the sample
size is small and the population standard deviation is
unknown, what distribution will be used to obtain the critical
value
 Exercises

7.19 A major American pharmaceutical company has

randomly sampled 14 customers who have used one of
their new painkilling drugs for two months. There is
concern that the drug may elevate the use’s heart rate.
Each of the customers in the sample had their heart
rate measured after using the drug one week. All
people in the sample had heart rates of 55 prior to
taking the drug. The following data were recorded for
the 14 customers:
50 70 60 70 90 72 50 80 85 55 66 70 80 40

 Suppose that you have just started working in the……,

construst a 90% confidence interval estimate for the
true mean heart rate for the company’s drug customer.
 Exercises

 7.25 Suppose it is know that the population

standard deviation is 40. If you wish to estimate
the population mean using a 95% confidence
interval estimate with a marging of error of 2.5.
what sample size will be required?
 7.27 Suppose as part of your job, you are asked
to estimate a population mean using a 90%
confidence interval and a margin of error of 60.
What size sample is required if the following
pilot sample is used to determine a value to use
for the population standard deviation
3239 3144 2960 2507 2842 3134 3249 2908 2754 2715
 Exercises
 7.36 The Northwest Pacific Phone Company
wishes to estimate the average number of
minutes its customers spend on long distance
calls per month. The company wants the
estimate made with 99% confidence and a
margin of error of no more than 5 minutes
a. A previous study indicated that the standard
deviation for long distance call is 21 minutes
per month. What should the sample size be?
b. Determine the required sample size if the
confidence level were changed from 99% to
90%
c. What would be required sample size be if the
confidence level was 95% and the margin of
error was 8 minutes?
 Exercises

 7.41 Compute the 95% confidence interval

estimate for p base on a sample size 400
when the sample proportion. p is equal to 0.3
 7.43 A sample of n =300 items has been
randomly selected. Of these 55 contain the
attribute of interest. Base on ths information,
compute a 90% confidence interval estimate
for the proportion of items in the population
that have this attribute
 Exercises

 An export-import shop in Seattle, recently sent a

buyer to China to purchase glass dinnerware
product from a company. The buyer is interested in
estimating the proportion of the glassware that
contains visual defects. A simple random sample of
130 items is selected and 13 are found to have a
visual defect.
a. Based on this information, what is the 90%
confidence interval estimate for the proportion of
all products made by the company?
b. Suppose the buyer would like to reduce the
margin of error for the estimate found in part a,
what options does he have
 Exercises

 7.54 A survey of 499 women for the American

Foot and Ankle Society revealed that 38% wear
flats to work.
a. Use this sample information to develop a 99%
confidence interval for the population proportion
of women who wear flats to work
b. Suppose the society wished to estimate the
proportion of women who wear athletic shoes to
work and the proportion of women who wear
flats to work within a margin of error of 0.01
with 95% confidence. Determine the sample size
required if only one sample is to be obtained
In a recent poll of 200 households, it was
found that 152 households had at least
one computer. Estimation the proportion
of households in the population that have
at least one computer. Construct a 95%
CIE for population proportion.
What size sample would I need to change
the margin of error to 0.03 in a 95%
confidence interval?

60
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