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in Statistics with

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Excel 2010

75 Problems

&

in

Detailed Solutions

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ta

An I

deal

Supp

Stat

leme

istic

nt fo

s

r St

Inst

uden

ruct

ts &

ors

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Application With MS Excel, R, and OpenOffice Calc

I HANDBOOK OF INTER-RATER RELIABILITY (Second Edition): The Definitive Guide to Measuring the Extent of Agreement Among Multiple

Raters

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I INTER-RATER RELIABILITY USING SAS: A Practical Guide for Nominal, Ordinal, and Interval Data

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CONFIDENCE INTERVALS

IN STATISTICS:

100 Problems & Solutions

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Copyright

Published by Advanced Analytics, LLC

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A single copy of this document may be printed and the printed copy be shared

with other interested parties. However, this document is NOT to be transmitted in

any other form including electronic or mechanical, photocopying, recording, or by

an information storage and retrieval system except by a reviewer who may quote

brief passages in a review to be printed in a magazine or a newspaper without

a writing permission from the publisher. For information, please contact Advanced

Analytics, LLC at the following address :

Advanced Analytics, LLC

PO BOX 2696

Gaithersburg, MD 20886-2696

e-mail: info@advancedanalyticsllc.com

regard of the subject matter covered. However, it is sold with the understanding

that the publisher assumes no responsibility for errors, inaccuracies or omissions.

The publisher is not engaged in rendering any professional services. A competent

professional person should be sought for expert assistance.

Publishers Cataloguing in Publication Data :

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Gwet, Kilem Li

Confidence Intervals in Statistics: 75 Problems and Solutions

A Practical Self-Study Guide for Students and Professionals/ By Kilem Li Gwet

p. cm.

1. Biostatistics

2. Statistical Methods

3. Statistics - Study - Learning. I. Title.

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Contents

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2. Confidence Interval for a Population Mean . . . . . . . . 3

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.2 Population Standard Deviation () is Unknown . . . . 14

2.3 Sample Size Determination () is Unknown . . . . . . . . 59

3. Confidence Interval for a Population Proportion 71

3.2 Sample Size Determination . . . . . . . . . . . . . . . . . . . . . . . . 91

4. Excels Analysis ToolPak . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

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4.2 Analyzing Raw Data with the Descriptive Statistics

Module. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102

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Introduction

inference for projecting findings from a limited amount of data to the more

general population of interest. It represents a range of values expected to

include an unknown quantity at the specified confidence level. Claiming for

example that the percent of Americans who support their presidents foreign

policy is 45% 3% with 95% certainty, means two things:

(i) That 45% is our best guess of the percent of Americans supporting the

presidents foreign policy based on the limited number of persons who

participated in our study. 45% is called the Point Estimate of the true

population percent of Americans supporting the Presidents foreign policy.

(ii) That our approximation is subject to an error margin of 3% that stems

from the fact that our study did not cover the entire population of Americans that constitutes our primary interest. Moreover, we can claim with

95% certainty that the values ranging from 42% through 48% contain

the true population percentage that we would have obtained had we

surveyed the entire US population. 95% is called the Confidence Level.

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intervals for population proportions or percentages. However, confidence intervals are also often used for population means of quantitative or measurement

variables such as income, height or weight. This booklet features numerous

carefully-selected exercises, all related to the construction of confidence intervals, and all accompanied with detailed and commented solutions. Readers

interested in a comprehensive and student-friendly exposition of the notion of

confidence interval, could find a detailed and vivid account in Gwet (2011)1 .

1

K. Gwet (2011), The Practical Guide to Statistics: Applications with Excel, R, and Calc,

Advanced Analytics, LLC

-1http://cixls.advancedanalyticsllc.com/index.html

-2-

Chapter 1: Introduction

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in chapter 2 aim at showing how confidence intervals for the population mean

of a measurement variable can be constructed, while those of chapter 3 focus

on the construction of confidence intervals for population proportions. While

many exercises illustrate the techniques for constructing confidence intervals,

the reader will also find numerous exercises on the sample size calculation.

The sample size calculation exercises illustrate the techniques for determining

the number of units required in the sample to ensure a specified error margin,

or a specified interval length.

Occasionally, you will need to construct confidence intervals or calculate the

required sample sizes based on a series of raw numbers representing the sample

data. Summary statistics will have to be generated before you can construct

the confidence intervals, or calculate the sample sizes. My recommendation is

to use the Descriptive Statistics module of the Excel 2010 Analysis ToolPak

to produce these summary statistics.

The Excel Analysis ToolPak is an Excel Add-In that comes with Microsoft

Office, and that must be activated before it can be used. Chapter 4 provides

detailed instructions for activating the ToolPak and for using the Descriptive

Statistics module.

If you have comments or questions, do not hesitate to contact the author

using one of the following 2 methods:

E-Mail: info@advancedanalyticsllc.com

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PO BOX 2696

Gaithersburg, MD 20886-2696

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Population Mean

means by separately treating the situation when the population standard deviation is known, and the situation when it is unknown. I find it more

practical to separately present the situation when the sample size n is large1 ,

and the situation when it is small.

Whether the sample size is large or small, the construction of a confidence

interval for a population mean relies heavily upon the sampling distribution

of the sample mean x. The probability distribution of the sample mean must be

known (at least approximately) for you to be able to construct the confidence

interval.

Large Sample Size (i.e. n 30)

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is available, then use it in place of the sample standard deviation (Note

that this interchangeability applies only when the sample size n is large). The

confidence interval of the population mean at a pre-specified confidence level

is given by:

s

s

n

n

C.I() =

(2.1)

(b),

n

n

of the standard Normal distribution, that is calculated with Excel 2010 as

1

For all practical purposes, a sample size n is considered large when it equals or exceeds

30, and is small otherwise

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follows:

z/2 = NORM.S.INV(1-/2)

(2.2)

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n

n

The confidence intervals of equation 2.1, are sometimes presented in the form,

When the size n of your sample is small (i.e. the number of sample elements is

below 30), then you must assume that the input observations follow the Normal distribution (at least approximately)2 , and separately treat the situations

where the population standard deviation is known and where it is unknown.

(i) Known Population Standard Deviation

interval associated with the population mean , is given by:

C.I() =

x z/2 ; x + z/2 ,

n

n

(2.3)

where = (Confidence Interval), and z/2 is the 100(1/2)th percentile of the standard Normal distribution, which is computed with Excel

2010 as shown in equation 2.2.

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interval associated with the population mean , at a given confidence

level is given by:

C.I() =

s

s

x t/2,n1 ; x + t/2,n1 ,

n

n

(2.4)

Gwet (2011), in the book The Practical Guide to Statistics: Applications with Excel,

R, and Calc discusses the situation where this assumption cannot be made. However, all

exercises in this section are based on the assumption of Normality or approximate Normality

http://cixls.advancedanalyticsllc.com/index.html

2.1

-5-

percentile of the Students t-distribution with n 1 degrees of freedom.

This quantity is calculated using Excel 2010 as follows:

(2.5)

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The Finite-Population Correction Factor

and specific finite population. The sample may well represent a sizeable portion

of the entire population. In this case, the standard error of the sample mean

calculated as the ratio of the standard deviation to the square root of the

sample size, will overestimate the true standard error of the mean. The

solution to this problem is to multiply the classical standard error by the

finite-population correction (FPC) factor defined as follows:

r

N n

,

(2.6)

FPC =

N 1

where N is the population size, and n the sample size.

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The rule of thumb for deciding whether to use or not use the FPC is to

use it whenever the sampling fraction that represents the ratio n/N of the

sample size to the population size is smaller than

using the FPC

0.05. When

is deemed appropriate, all ratios of the

form / n or s/

n must be replaced

with their adjusted versions FPC / n and FPC s/ n. The corresponding

confidence intervals must be computed accordingly.

2.1

Exercise 2.1

A sample of 49 observations is taken from a normal population with

a standard deviation of 10. The sample mean is 55. Determine the

99 percent confidence interval for the population mean.

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Solution

is unknown a

=10

n = 49

x = 55

0.99

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Population Mean:

Population standard deviation:

Sample Size :

Sample Mean :

Confidence Level:

a

This quantity has to be unknown, otherwise there would not be any need to develop a

confidence interval for a known quantity.

Since the probability distribution of the raw data is normal, so is the probability distribution of the sample mean x. Equation 2.1(b) will be used because

of the large sample size that exceeds 30, and the availability of the population

standard deviation .

Of all the elements needed to construct the confidence interval (c.f. equation

2.1(b)), only z/2 is yet to be obtained. It follows from the confidence level

0.99 that = 1 0.99 = 0.01 and /2 = 0.005. Consequently, z0.005 represents

the 99.5th percentile3 of the Normal distribution needed to construct the 99th

confidence interval. It is obtained with Excel 2010 as shown in Figure 2.1.

The two confidence bounds of the interval are given by,

CI()=(51.32 ;58.68).

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It is generally recommended to round the lower bound down and the upper

bound up. That is, if for example the lower bound is 13.268, and you want to

display only 2 digits after the decimal point, then you should present 13.26 (and

not 13.27). On the other hand, an upper bound of 13.262 would be rounded

up to 13.27 (and not 13.26). The rationale is to ensure the validity of the

confidence level with respect to the final interval.

3

Note that 99.5 = 100 (1 /2) is the recommended percentile in equation 2.1.

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2.1

Figure 2.1. Calculating the 99.5th percentile of the Normal distribution with

Excel 2010

Exercise 2.2

A sample of 81 observations is taken from a normal population with

a standard deviation of 5. The sample mean is 40. Determine the 95

percent confidence interval for the population mean.

Solution

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Population Mean:

Population standard deviation:

Sample Size :

Sample Mean :

Confidence Level :

is unknown a

=5

n = 81

x = 40

0.95

This quantity has to be unknown, otherwise there would not be any need to develop a

confidence interval for a known quantity.

Since the probability distribution of the raw data is normal, so is the probability distribution of the sample mean x. Equation 2.1(b) will be used because

of the large sample size that exceeds 30, and the availability of the population

standard deviation .

It follows from the confidence level 0.95 that = 1 0.95 = 0.05 and

/2 = 0.025. Consequently, z0.025 represents the 97.5th percentile of the Normal

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with Excel 2010 as 1.96 =NORM.S.INV(1-0.05/2) .

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The 95% confidence interval of the population mean is,

CI()=(38.9 ;41.9).

Exercise 2.3

A sample of 10 observations is selected from a normal population

for which the population standard deviation is known to be 5. The

sample mean is 20.

a. Determine the standard error of the mean.

percent confidence interval even though the sample is less than

30.

mean.

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Solution

Population Mean:

Population standard deviation:

Sample Size :

Sample Mean :

is unknown a

=5

n = 10

x = 20

This quantity has to be unknown, otherwise there would not be any need to develop a

confidence interval for a known quantity.

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2.1

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(b) Although the sample size n is smaller than 30, we can use formula 2.3

because the population is normal and the population standard deviation

is known to be 5.

(c) 95% confidence interval for

Confidence level=1

= 0.95. The lower bound is LB = xz0.025 /n =

20 1.96 5/ 10 = 23.1. The 95% confidence interval of the population

mean is,

CI()=(16.9 ;23.1).

Exercise 2.4

A research firm conducted a survey to determine the mean amount

steady smokers spend on cigarettes during a week. They found the

distribution of amounts spent per week followed the normal distribution with a standard deviation of $5. A sample of 49 steady smokers

revealed that x = $20.

a. What is the point estimate of the population mean ? Explain

what it indicates.

b. Using the 95 percent level of confidence, determine the confidence interval for . Explain what it indicates.

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Solution

Population Mean:

Distribution of data:

Population standard deviation:

Sample Size :

Sample Mean :

is unknown

Normal

=$5

n = 49

x = $20

(a) The point estimate of the population mean is the sample mean x = $20.

It represent our best guess of the magnitude of the actual and unknown

population mean .

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2.2

- 17 -

2.5 as follows:

t = t/2,n1 = t0.05,15 = T.IN V (1 0.05, 15) = 1.75.

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Note that = 1 0.90 = 0.10, and 0.05 = /2. For a confidence level

of 90%, the value of t represents the 95th percentile of the t distribution

with n 1 = 16 1 = 15 degrees of freedom.

(d) We will develop the 90% confidence interval for the population mean

using expression 2.4. The lower bound LB and the upper bound UB of

the confidence interval ar obtained as follows:

s

20

LB = x t0.05 = 60 1.75 = 51.2,

n

15

s

20

UB = x + t0.05 = 60 + 1.75 = 68.8.

n

15

The 90% confidence interval of the population mean number of eggs per

chicken is,

CI()=(51.2 ;68.8),

pounds, because 63 falls inside the 90% confidence interval. This interval

is supposed to contain the true population mean with 90% certainty.

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Exercise 2.11

Merrill Lynch Securities and Health Care Retirement, Inc., are two

large employers in downtown Toledo, Ohio. They are considering

jointly offering child care for their employees. As a part of the feasibility study, they wish to estimate the mean weekly child-care cost of

their employees. A sample of 10 employees who use child care reveals

the following amounts spent last week.

$107 $92 $97

$95

$105

$95

$104

Interpret the result.

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Solution

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The population mean is =the mean weekly child-care cost of the population

of Merrill Lynch Securities and Health Care Retirement, Inc. employees. It is

unknown and must be estimated with a 90% confidence interval.

Capture the 10 data points of this exercise in Excel. This data may be

organized either vertically or horizontally. Following the directives of section

4.2 of chapter 4, use the Descriptive Statistics module of the Excel 2010s

Analysis ToolPak to produce Table 2.10 below (make sure to specify the correct

confidence level of 90%).

Table 2.10 : Output of the Descriptive Statistics Module

Mean

Standard Error

Median

Mode

Standard Deviation

Sample Variance

Kurtosis

Skewness

Range

Minimum

Maximum

Sum

Count

Confidence Level(90.0%)

98.6

1.752

98

95

5.542

30.711

-1.304

0.165

16

91

107

986

10

3.212

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contains the error margin4 E = 3.212 associated with the sample mean x =

98.6. These two numbers should be used to obtain the 90% confidence interval

as follows:

Lower Bound = x E = 98.6 3.212 = 95.388,

Upper Bound = x + E = 98.6 + 3.212 = 101.812.

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2.2

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C.I()=(95.38 ;101.82).

Interpretation

Although the feasibility study estimated the mean weekly child-care cost of

the employees to be about $98.6 based on a small sample of 10 employees, the

actual value of that mean is between $95.38 and $101.82 with 90% certainty,

as suggested by the confidence interval.

Exercise 2.12

The Greater Pittsburgh Area Chamber of Commerce wants to estimate the mean time workers who are employed in the downtown area

spend getting to work. A sample of 15 workers reveals the following

number of minutes spent traveling.

29 38 38

40 37 37

33

42

38

30

21 45 34

29 35

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Interpret the result.

Solution

unknown and must be estimated with a 98% confidence interval.

Capture the 15 data points of this exercise in Excel. This data may be

organized either vertically or horizontally. Using the directives of section 4.2

of chapter 4, use the Descriptive Statistics module of the Excel 2010s Analysis ToolPak to produce Table 2.11 below (make sure to specify the correct

confidence level of 98%).

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2.3

- 59 -

2.3

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The narrower the confidence interval, the more information it provides on the real magnitude of the population mean. A too wide confidence

interval on the other hand provides us with a wide range of possible values

for the population mean, and little information about the magnitude of the

mean itself. Consequently, when designing a research study researchers often

want to determine the sample size needed to obtain a confidence interval with

a pre-specified length L.

We have seen that the confidence interval of the population mean generally has the form (x E; x + E) where

x is the sample mean, and E the

margin of error defined as E = z/2 s/ n when n is reasonably large. n is the

sample size, s the standard deviation10 , and z/2 the 100(1 /2)th percentile

of the standard Normal distribution with = 1 Confidence Level.

For a specified error margin E and confidence level 1, the desired sample

size is given by,

z/2 s 2

(2.7)

n=

.

E

If it is the length L of the confidence interval that is provided, then the desired

sample size will be given by:

n=

z/2 s

L/2

2

(2.8)

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UP to the nearest integer value to ensure a confidence interval that matches

the pre-determined error margin or is narrower.

11

Note that the sample mean is always the center of the confidence interval.

Therefore the population mean is always within the error margin of the sample

mean at the specified confidence level.

10

Note that s could be the true population standard deviation when it is known, or

could be its estimated value obtained from a pilot study. Even a small pilot may yield an

estimated standard deviation sufficiently precise for the purpose of calculating the sample

size.

11

Rounding up to nearest integer means 56.02 for example will be rounded up to 57.

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Exercise 2.40

A population is estimated to have a standard deviation of 10. We

want to estimate the population mean within 2, with a 95 percent

level of confidence. How large a sample is required ?

Solution

Error Margin:

E=2

Confidence Level:

0.95 (or = 0.05)

which leads to the predicted sample size of,

2

1.96 10

n=

= 97.

2

Exercise 2.41

We want to estimate the population mean within 5, with a 99 percent

level of confidence. The population standard deviation is estimated

to be 15. How large a sample is required ?

Solution

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Error Margin:

E=5

Confidence Level:

0.99 (or = 0.01)

which leads to the predicted sample size of,

2

2.58 15

n=

= 60.

5

12

13

Note that 99.5 = 100 (1 /2)

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for installing the Excel 2010 Analysis ToolPak add-in, and (ii) to show how

the ToolPak is used to construct confidence from raw input data.

4.1

out in 4 easy steps, which are described as follows:

1 Opening the Excel Options Form

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From the main Excel menu, select the File tab from the menu bar, then Options

as shown in Figure 4.1. These actions should open the Excel Options form of

Figure 4.2.

Select "Options"

- 99 http://cixls.advancedanalyticsllc.com/index.html

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