Statistical Inference

Estimation
Point Estimate
One way to obtain information about a population mean μ without taking a census is to estimate it by a sample
mean. x ,
A point estimate of a parameter is the value of a statistic used to estimate the parameter.
A statistic is called an unbiased estimator of a parameter if the mean of all its possible values equals the
parameter; otherwise, the statistic is called a biased estimator of the parameter

Confidence-Interval Estimate
A sample mean is usually not equal to the population mean; generally, there is sampling error. Therefore, we
should accompany any point estimate of μ with information that indicates the accuracy of that estimate. This
information is called a confidence-interval estimate for μ,

Confidence Intervals for One Population Mean (σ =Known ¿

Example 1: Prices of New Mobile Homes
Consider the problem of estimating the (population) mean price, μ, of all new mobile homes by using the
sample data in the given Table.
TABLE
Prices ($1000s) of 36 randomly selected new mobile homes
67.8 68.4 59.2 56.9 63.9 62.2 55.6 72.9 62.6
67.1 73.4 63.7 57.7 66.7 61.7 55.5 49.3 72.9
49.9 56.5 71.2 59.1 64.3 64.0 55.9 51.3 53.7
56.0 76.7 76.8 60.6 74.5 57.9 70.4 63.8 77.9

Let’s assume that the population standard deviation of all such prices is $7.2 thousand, that is, $7200.
a. Find sample mean and standard error of the variable x, that is, the sampling distribution of the sample
mean for samples of size 36.
b. Use part (a) to show that 95.44% of all samples of 36 new mobile homes have the property that the
interval from x − 2.4 to x + 2.4 contains μ.
c. Construct a confidence interval for population mean from x – 3 S.E to x + 3 S.E
d. Construct a 90% CI for population mean μ, that is x ± z α / 2 σ / √ ❑
we can say that
100(1 − α)% of all samples of size n have the property that the interval from

Example 2: The Civilian Labor Force

Fifty people in the civilian labor force are randomly selected; their ages are displayed in the given table
below. Find a 95% confidence interval for the mean age, μ, of all people in the civilian labor force.
Assume that the population standard deviation of the ages is 12.1 years.
Ages, in years, of 50 randomly selected people in the civilian labor force
22 58 40 42 43 32 34 45 38 19
33 16 49 29 30 43 37 19 21 62
60 41 28 35 37 51 37 65 57 26
27 31 33 24 34 28 39 43 26 38
42 40 31 34 38 35 29 33 32 33

We want a 95% confidence interval, so α = 1 − 0.95 = 0.05. From Z-Table,

Zα/2 = Z0.05/2 = Z0.025 = 1.96.
We know σ = 12.1, n = 50, and, Zα/2 = 1.96. To compute. x for the given data, we apply the usual formula:

to one decimal place. Consequently, a 95% confidence interval for μ is from

or 33.0 to 39.8.

Interpretation We can be 95% confident that the mean age, μ, of all people in the civilian labor force is
somewhere between 33.0 years and 39.8 years.

Exercise
Q1: In each case, use the one-mean Z-interval procedure to find a confidence interval for the mean of the
population from which the sample was drawn.

Q2: A random sample of 15 diabetics yielded the average age 45, in years. Find a 95% confidence
interval for the mean age, μ, of all people with diabetes. Assume that σ = 11.2 years.

Q3: A random sample of 20 maximum sentences for murder yielded the average 44, in months. Find a
92% confidence interval for the mean maximum sentence of all murders. Assume a population standard
deviation of 30 months.

Q4: According to an article studied on various characteristics of political prisoners with chronic Post
Traumatic Stress Disorder (PTSD), the mean duration of imprisonment for 32 patients with chronic PTSD
was 33.4 months. Assuming σ = 42 months, determine a 90% confidence interval for the mean duration of
imprisonment, μ, of all political prisoners with chronic PTSD. Interpret your answer in words.

Margin of Error
The margin of error for the estimate of μ is

Sample Size for Estimating μ

The sample size required for a (1 − α)-level confidence interval for μ with a specified margin of error, E,
is given by the formula

rounded up to the nearest whole number

Length of Confidence Interval

The margin of error is equal to half the length of the confidence interval

Length of Confidence Interval = E + E = 2E = 2 (Margin of Error)

Example:
Consider again the problem of estimating the mean age, μ, of all people in the civilian labor
force.
A. Determine the sample size needed to be 95% confident that μ is within 0.5 year of the
estimate, x. Recall that σ = 12.1 years.
B. Find a 95% confidence interval for μ if a sample of the size determined in part (A) has a mean
age of 38.8 years.

Solution
A. To find the sample size, we use. We know that σ = 12.1 and E = 0.5. The confidence level is
0.95, which means that α = 0.05 and Zα/2 = Z0.025 = 1.96. Thus

which, rounded up to the nearest whole number, is 2250.

Interpretation If 2250 people in the civilian labor force are randomly selected, we can be 95%
confident that the mean age of all people in the civilian labor force is within 0.5 year of the mean
age of the people in the sample.

B. Applying Procedure 8.1 with α = 0.05, σ = 12.1, x = 38.8, and n = 2250, we get the
confidence interval

or 38.3 to 39.3.
Interpretation We can be 95% confident that the mean age, μ, of all people in the civilian labor
force is somewhere between 38.3 years and 39.3 years.

Exercise
Q1: In estimating the mean monthly fuel expenditure, μ, per household vehicle, the Energy Information
Administration takes a sample of size 6841. If σ = $20.65, determine the margin of error in estimating μ at
the 95% level of confidence.

Q2: A confidence interval for a population mean has a margin of error of 3.4.
A. Determine the length of the confidence interval.
B. If the sample mean is 52.8, obtain the confidence interval.
Ans: A) 6.8 B) 49.4 to 56.2

Q3: A confidence interval for a population mean has a margin of error of 0.047.
A. Determine the length of the confidence interval.
B. If the sample mean is 0.205, obtain the confidence interval.

Q4: A confidence interval for a population mean has length 20.

A. Determine the margin of error.
B. If the sample mean is 60, obtain the confidence interval.
Ans: A) 10 B) 50 to 70

Q5: Suppose that a simple random sample is taken from a normal population having a standard deviation
of 10 for obtaining a 95% confidence interval for the mean of the population.
A. If the sample size is 4, obtain the margin of error.
B. Repeat part (a) for a sample size of 16.
Confidence Intervals for One Population Mean (When σ = Unknown)

Example:
A simple random sample of pickpocket offenses yielded the losses, in dollars, shown in the table
below. Use the data to find a 95% confidence interval for the mean loss, μ, of all pickpocket
offenses.
Losses ($) for a sample of 25 pickpocket offenses
447 207 627 430 883
313 844 253 397 214
217 768 1064 26 587
833 277 805 653 549
649 554 570 223 443

Step 1 For a confidence level of 1 − α, use T-Table to find tα/2 with df = n − 1, where n is the
sample size.
We want a 95% confidence interval, so α = 1 − 0.95 = 0.05. For n = 25, we have df = 25 − 1 =
24. From T-Table tα/2 = t0.05/2 = t0.025 = 2.064.
Step 2 The confidence interval for μ is from

From Step 1, tα/2 = 2.064. Applying the usual formulas for x and s to the data in the given table
gives x = 513.32 and s = 262.23, so a 95% confidence interval for μ is from

or 405.07 to 621.57.
Interpretation We can be 95% confident that the mean loss of all pickpocket offenses is
somewhere between $405.07 and $621.57.

Exercise:
Q1: A sample of 30 commuters yielded the following commute times, in minutes.
24 28 31 29 54 28
27 38 24 14 46 38
31 16 21 11 21 15
30 29 17 23 27 18
29 44 19 35 34 38

a. Find a 90% confidence interval for the mean commute time of all commuters (Note: x = 27.97
minutes and s = 10.04 minutes).
b. Interpret your answer from part (a).

Q2: A random sample of 20 people gave the following number of hours of television watched
per day for last year.
1.0 4.6 5.4 3.7 5.2
1.7 6.1 1.9 7.6 9.1
6.9 5.5 9.0 3.9 2.5
2.4 4.7 4.1 3.7 6.2
a. Find a 95% confidence interval for the amount of television watched per day last year by the
average person. (Note: x = 4.760 hr and s = 2.297 hr.)
b. Interpret your answer from part (a).

Q3: A sample of local bicycle commuters yields the following times, in minutes.
22 19 24 31 29 29
21 15 27 23 37 31
30 26 16 26 12 23
48 22 29 28
Find a 90% confidence interval for the mean commuting time of all local bicycle commuters in
the city. (Note: The sample mean and sample standard deviation of the data are 25.82 minutes
and 7.71 minutes, respectively.)
Confidence Intervals for a Population Standard Deviation

Inferences for One Population Standard Deviation

Recall that standard deviation is a measure of the variation (or spread) of a data set. Also recall
that, for a variable x, the standard deviation of all possible observations for the entire population
is called the population standard deviation or standard deviation of the variable x. It is denoted
σx or, when no confusion will arise, simply σ.
Suppose that we want to obtain information about a population standard deviation. If the
population is small, we can often determine σ exactly by first taking a census and then
computing σ from the population data. However, if the population is large, which is usually the
case, a census is generally not feasible, and we must use inferential methods to obtain the
required information about σ.

One-Standard-Deviation χ2-Interval Procedure

Purpose To find a confidence interval for a population standard deviation, σ
Assumptions
1. Simple random sample
2. Normal population
Step 1 For a confidence level of 1 − α, use Chi-square Table to find χ21−α/2 and χ2α/2 with df = n
−1.
Step 2 The confidence interval for σ is from

where χ21−α/2 and χ2α/2 are found in Step 1, n is the sample size, and s is computed from the sample
data obtained.
Step 3 Interpret the confidence interval.

Example:
Xenical Capsules is used to treat obesity in people with risk factors such as diabetes, high blood
pressure, and high cholesterol or triglycerides. Xenical works in the intestines, where it blocks
some of the fat a person eats from being absorbed. A standard prescription of Xenical is given in
120-milligram (mg) capsules. Although the capsule weights can vary somewhat from 120 mg
and from each other, keeping the variation small is important for various medical reasons. Based
on standards set by authorities we determined that a standard deviation of Xenical capsule
weights of less than 2 mg is acceptable. Using the sample data given below determine a 90%
confidence
interval for the standard deviation, σ, of the weights of all Xenical capsules.

Weights (mg) of 10 Xenical capsules

120.94 118.58 119.41 120.23

121.13 118.22 119.71 121.09
120.56 119.11
Solution:
For a 90% confidence interval, the confidence level is 0.90 = 1 − 0.10, and so α = 0.10. Also, for
n = 10, df = 9. In Chi Square Table, we find that

and

We have n = 10, and s = 1.055 mg.

So, a 90% confidence interval for σ is from

or 0.77 to 1.74.
Interpretation We can be 90% confident that the standard deviation of the weights of all
Xenical capsules is somewhere between 0.77 mg and 1.74 mg.
Exercise:
1- Gas mileage estimates for cars and light-duty trucks are determined and published by the
U.S. Environmental Protection Agency (EPA). According to the EPA, “. . . themileages
obtained bymost drivers will be within plus orminus 15 percent of the [EPA] estimates. . . .”
Themileage estimate given for one model is 23 mpg on the highway. If the EPA claim is true,
the standard deviation of mileages should be about 0.15 · 23/3 = 1.15 mpg. A random sample
of 12 cars of this model yields the following highway mileages.
24.1 23.3 22.5 23.2
22.3 21.1 21.4 23.4
23.5 22.8 24.5 24.3
At the 5% significance level, do the data suggest that the standard deviation of highway
mileages for all cars of this model is different from 1.15 mpg? (Note: s = 1.071.)
2- Homestyle Pizza of Camp Verde, Arizona, provides baking instructions for its premade
pizzas. According to the instructions, the average baking time is 12 to 18 minutes. If the
times are normally distributed, the standard deviation of the times should be approximately 1
minute. A random sample of 15 pizzas yielded the following baking times to the nearest tenth
of a minute.
15.4 15.1 14.0 15.8 16.0
13.7 15.6 11.6 14.8 12.8
17.6 15.1 16.4 13.1 15.3
At the 1% significance level, do the data provide sufficient evidence to conclude that the
standard deviation of baking times exceeds 1 minute? (Note: The sample standard
deviation of the 15 baking times is 1.54 minutes.)
3- An electronic counter records the number of bolts passing it on a conveyer belt and stops the
run when the count reaches a preset number. The following data give the times, in seconds,
needed to count 20 bolts for eight different runs.
10.78 9.39 9.84 13.94
12.33 7.32 7.91 15.58
Do the data provide sufficient evidence to conclude that the standard deviation in the time
needed to count 20 bolts exceeds 2 seconds? Use α = 0.05. (Note: The sample standard
deviation of the eight times is 2.8875 seconds.)
4- A simple random sample of 14 tissue types yielded the following number of genes.
66 47 43 101 201 83 93
 82 120 64 244 51 70 14
Find 99% Confidence Interval for population variance.