Chapter 07

Statistics
Chapter 7: Inferences Based on a

Single Sample: Estimation with
Confidence Interval
Where Weve Been
Populations are characterized by

numerical measures called parameters
Decisions about population parameters
are based on sample statistics
Inferences involve uncertainty reflected
in the sampling distribution of the
statistic
McClave, Statistics, 11th ed. Chapter 7:
Inferences Based on a Single Sample:
Estimation by Confidence Intervals
Where Were Going
Estimate a parameter based on a

large sample
Use the sampling distribution of the
statistic to form a confidence interval
for the parameter
Select the proper sample size when
estimating a parameter
7.1: Identifying the Target

Parameter
The unknown population parameter

that we are interested in estimating is
called the target parameter.
Parameter
Key Word or Phrase
Type of Data
Mean, average
Quantitative
Proportion, percentage,
fraction, rate
Qualitative

7.2: Large-Sample Confidence

Interval for a Population Mean
A point estimator of a population

parameter is a rule or formula that tells
us how to use the sample data to
calculate a single number that can be
used to estimate the population
parameter.


Suppose a sample of 225 college

students watch an average of 28 hours
of television per week, with a standard
deviation of 10 hours.
What can we conclude about all college

students television time?


Assuming a normal distribution for television

hours, we can be 95%* sure that
x 1.96
n
10
28 1.96
225
28 1.96 (.67)
28 1.31
*In the standard normal

distribution, exactly 95% of the
area under the curve is in 7the
interval
-1.96 +1.96

An interval estimator or confidence interval is a

formula that tell us how to use sample data to
calculate an interval that estimates a population
parameter.
x z x


The confidence coefficient is the probability that a randomly

selected confidence interval encloses the population parameter.
The confidence level is the confidence coefficient expressed
as a percentage.
(90%, 95% and 99% are very commonly used.)
95% sure
x z x


The area outside the confidence interval is called

95 % sure
x z x
So we are left with (1 95)% = 5% = uncertainty about

10

Large-Sample (1-)% Confidence

Interval for
x z a / 2 x x z a / 2
n
If is unknown and n is large, the

confidence interval becomes
s
x za / 2 sx x za / 2
n
11

If n is large, the sampling distribution of the sample

mean is normal, and s is a good estimate of
12
7.3: Small-Sample Confidence

Large Sample
Small Sample
Sampling Distribution on
is normal
Known or large n
Standard Normal (z)
Distribution
x za / 2
Sampling Distribution on
is unknown
Unknown and small n
Students t Distribution
(with n-1 degrees of
freedom)
x ta / 2
s
n
13

Large Sample
x za / 2
Small Sample
x ta / 2

s
n
14

* If not, see Chapter 14

15

Suppose a sample of 25 college

students watch an average of 28 hours
of television per week, with a standard
deviation of 10 hours.
What can we conclude about all college

students television time?

16

Assuming a normal distribution for television

hours, we can be 95% sure that
s
x 2 .064
n
10
28 2.064
25
28 2.064(.67)
28 4.128
17

Interval for a Population Proportion
p
pq
n
q 1 p
0 p 3 p 1
18

Sampling distribution of

19

We can be 100(1-)% confident that
p p z / 2 p p z / 2
where
x
p
n
pq
p z / 2
n
and
p q
n
q 1 p

20

A nationwide poll of nearly
1,500 people
conducted by the
syndicated cable
television show Dateline:
USA found that more than
70 percent of those
surveyed believe there is
intelligent life in the
universe, perhaps even in
our own Milky Way
Galaxy.
What proportion of the entire

population agree, at the 95%
confidence level?
p p z a / 2
p q
n
(.70)(.30)
p .70 1.96
1500
p .70 (1.96)(.012)
p .70 .023

21

If p is close to 0 or 1, Wilsons adjustment for estimating p yields better results
where
~
p z / 2
~
~
p (1 p )
n4
x2
~
p
n4
22

Suppose in a particular year
the percentage of firms
declaring bankruptcy that
had shown profits the
previous year is .002. If 100
firms are sampled and one
had declared bankruptcy,
what is the 95% CI on the
proportion of profitable firms
that will tank the next year?
~
~
p
(
1
p)
~
p p z / 2
n4
x2
1 2
~
p
.0289
n 4 100 4
.0289(1 .0289)
p .0289 1.96
100 4
p .0289 .032

23
7.5: Determining the Sample Size
To be within a certain sampling error (SE) of

with a level of confidence equal to
100(1-)%, we can solve

z / 2
SE
n
( z / 2 )
n
SE 2
2
for n:

24
The value of will almost always be

unknown, so we need an estimate:
s from a previous sample

approximate the range, R, and use R/4
Round the calculated value of n

upwards to be sure you dont have too
small a sample.
25
Suppose we need to know the mean

driving distance for a new composite
golf ball within 3 yards, with 95%
confidence. A previous study had a
standard deviation of 25 yards. How
many golf balls must we test?

26

Suppose we need to
know the mean
driving distance for a
new composite golf
ball within 3 yards,
with 95% confidence.
A previous study had
a standard deviation
of 25 yards. How
many golf balls must
we test?
( z / 2 )
n
2
SE
2
2
1.96 25
n
2
3
n 266.78 267

27
For a confidence interval

on the population
proportion, p, we can
solve
z / 2
pq
SE
n
2
for n: n ( z / 2 ) ( pq )
2
SE
To estimate p, use
the sample proportion
from a prior study, or
use p = .5.
Round the value of n
upward to ensure the
sample size is large
enough to produce the
required level of
confidence.

28
How many cellular phones must a

manufacturer test to estimate the
fraction defective, p, to within .01 with
90% confidence, if an initial estimate
of .10 is used for p?

29

How many cellular
phones must a
manufacturer test to
estimate the fraction
defective, p, to within .
01 with 90%
confidence, if an initial
estimate of .10 is
used for p?
pq
SE z / 2
n
( z / 2 ) 2 ( pq )
n
2
( SE )
(1.645) 2 (.1)(.9)
n
(.01) 2
n 2435.4 2436

30

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Chapter 07

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Statistics

Chapter 7: Inferences Based on a

Where Weve Been

Populations are characterized by

Where Were Going

Estimate a parameter based on a

7.1: Identifying the Target

The unknown population parameter

Key Word or Phrase

McClave, Statistics, 11th ed. Chapter 7:

7.2: Large-Sample Confidence

A point estimator of a population

McClave, Statistics, 11th ed. Chapter 7:

7.2: Large-Sample Confidence

Suppose a sample of 225 college

What can we conclude about all college

McClave, Statistics, 11th ed. Chapter 7:

7.2: Large-Sample Confidence

Assuming a normal distribution for television

*In the standard normal

7.2: Large-Sample Confidence

An interval estimator or confidence interval is a

McClave, Statistics, 11th ed. Chapter 7:

7.2: Large-Sample Confidence

The confidence coefficient is the probability that a randomly

McClave, Statistics, 11th ed. Chapter 7:

7.2: Large-Sample Confidence

The area outside the confidence interval is called

So we are left with (1 95)% = 5% = uncertainty about

McClave, Statistics, 11th ed. Chapter 7:

7.2: Large-Sample Confidence

Large-Sample (1-)% Confidence

If is unknown and n is large, the

7.2: Large-Sample Confidence

If n is large, the sampling distribution of the sample

7.3: Small-Sample Confidence

7.3: Small-Sample Confidence

McClave, Statistics, 11th ed. Chapter 7:

7.3: Small-Sample Confidence

* If not, see Chapter 14

McClave, Statistics, 11th ed. Chapter 7:

7.3: Small-Sample Confidence

Suppose a sample of 25 college

What can we conclude about all college

McClave, Statistics, 11th ed. Chapter 7:

7.3: Small-Sample Confidence

Assuming a normal distribution for television

7.4: Large-Sample Confidence

7.4: Large-Sample Confidence

McClave, Statistics, 11th ed. Chapter 7:

7.4: Large-Sample Confidence

McClave, Statistics, 11th ed. Chapter 7:

7.4: Large-Sample Confidence

What proportion of the entire

McClave, Statistics, 11th ed. Chapter 7:

7.4: Large-Sample Confidence

If p is close to 0 or 1, Wilsons adjustment for estimating p yields better results

7.4: Large-Sample Confidence

McClave, Statistics, 11th ed. Chapter 7:

7.5: Determining the Sample Size

To be within a certain sampling error (SE) of

McClave, Statistics, 11th ed. Chapter 7:

7.5: Determining the Sample Size

The value of will almost always be