ESTIMATION

What is a parameter? 02
 Note that parameters are usually unknown but
they can be estimated from sample values.
 Sample measures are used to estimate population
values.
 An estimate is a value or a range of values that
approximate a parameter. It is based on sample
statistics.
 Estimation is the process of determining
parameter values.
There are two ways of reporting an estimate 02
 Reporting a single number – called a point estimate. The
mean is the best estimator.
 Reporting a range of values – called interval estimate. An
interval estimate, called confidence interval, is a range
of values that is used to estimate a parameter. This estimate
may or may not contain the true parameter value.
 The confidence level of an interval estimate of a parameter
is the probability that the interval estimate contains the
parameter. It describes what percentage of intervals from
many different samples contain the unknown population
parameter.
The general formula for confidence intervals
for large samples is

 σ   σ 
X  Zα    μ  X  Zα  
 n 2
 n
2
The z values are the confidence coefficients. They are also
called the critical values.
The upper confidence boundary is σ
X + Zα
2 n
σ
The lower confidence boundary is X _ Zα
σ 2 n
Zα
2 n is called the margin of error and is defined as the
maximum difference between the observed sample mean and the
true mean of the population.
These are the values of z statistic given
the level of confidence.
Example1. A researcher wants to estimate the number
of hours that 5-year old children spend watching
television. A sample of 50 five-year old children was
observed to have a mean viewing time of 3 hours. The
population is normally distributed with a population
standard deviation 𝜎=0.5 hour.
a. Find the best point estimate of the population
mean.
b. Compute for the 95% confidence interval of the
population mean.
 There is an appropriate distribution when the sample
size is small such that the CLT cannot be applied
and the population standard deviation is unknown.
 When 𝑠 is used, especially when the sample size is
small, the t-distribution is used.
 The general expression for the confidence interval
when 𝜎 is unknown is given by 𝑋 ̅±𝑡(𝑠/√𝑛) and the
distribution of values is called t-distribution.
 The concept of degrees of freedom (df) is used in the
t-distribution.
 The df is the number of values that are free to vary
after a sample statistic has been computed, and they tell
us the specific curve to use when a distribution consists
of a family of curves.
 The formula for computing the confidence interval
using the t-distribution is
 s   s 
X  t   μ  X  t 
 n  n
Example3. Rochelle wants to know the mean of all
entering trainees in a boot camp. The mean age of a
random sample of 25 trainees is 18 years and the
standard deviation is 1.3 years. The sample comes
from a normally distributed population. Use 0.05 to
find the following:
a. the point estimate;
b. The error E, and
c. and the interval estimate of the population mean.
Example2. An admission officer of an educational
institution wants to know the mean age of all
entering mathematics majors. He computed a mean
age of 18 years and a standard deviation of 1.2 years
on a random sample of 25 entering mathematics
majors purportedly coming from a normally
distributed population. With 99% confidence, find
the point estimate and the interval estimate of the
population mean.
 POINT
ESTIMATE FOR
PROPORTION
Point Estimate for Proportion
 Percentages are preferred when reporting
frequencies of subsets of populations.
 Proportions also represent probabilities.
 Percentages are converted to proportions
in decimal form.
Point Estimate for Proportion
The following symbols will be used:
 n is the number of observations
 pˆ (p hat) is the sample proportion and equals to
number of desired outcomes
pˆ 
number of sample elements
 p is the population proportion
 qˆ  1  pˆ
Characteristic of the Sampling
Distribution of pˆ
 pˆ is the unbiased estimator of p
The standard deviation of the
pq
sampling distribution of pˆ is n ,
pq
that is, σp  n , where
q=1–p
The formula for computing a large sample
confidence interval for a population proportion p

 pˆq̂   pˆq̂ 
pˆ  z   p  pˆ  z 
 n   n 
   
Point Estimate for Proportion
In a job satisfaction survey in a
certain mall, 700 employees were
asked if they were satisfied with their
jobs. There were 518 who responded
with a YES. What proportion is this?
Interval Estimate for Proportion
In a certain food stall, 278 out of 500
randomly selected consumers indicate their
preference for a new kind of food
combination. Use a 99% confidence
interval to estimate the true proportion p
who like the new food combination.
Interval Estimate for Proportion
In a school, a survey was conducted to
determine the proportion of students
who want to major in Science. If 368
out of 850 students said Yes, with 95%
confidence, what is the interval
estimate?