Chapter 8

Statistical Inference: Estimation for

Single Populations

Dr. P. Mary Jeyanthi

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 Learning Objectives
• Know the difference between point and interval
estimation.
• Estimate a population mean from a sample mean
when s is known.
• Estimate a population mean from a sample mean
when s is unknown.
• Estimate a population proportion from a sample
proportion.
• Estimate the population variance from a sample
variance.
• Estimate the minimum sample size necessary to
achieve given statistical goals.

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 Statistical Estimation
• In statistics, estimation refers to the process by which one makes
inferences about a population, based on information obtained from a
sample.

Calculate x
to estimate 
Population Sample
 Process of x
Inferential Statistics
(parameter ) (statistic )

Select a
random sample

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• Point estimate -- the single value of a statistic calculated
from a sample
– For example, the sample mean x is a point estimate of the population
mean μ.

• Interval Estimate -- a range of values calculated from a

sample statistic(s) and standardized statistics, such as the
z.

– Selection of the standardized statistic is determined by the

sampling distribution.
– Selection of critical values of the standardized statistic is
determined by the desired level of confidence.
– For example, a < x < b is an interval estimate of the
population mean μ. It indicates that the population mean is
greater than a but less than b.

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• The confidence level refers to the long-term
success rate of the method, that is, how
often this type of interval will capture the
parameter of interest.

• A specific confidence interval gives a range

of plausible values for the parameter of
interest.

Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-5
 Confidence Intervals
• Statisticians use a confidence interval to express
the precision and uncertainty associated with a
particular sampling method. A confidence interval
consists of three parts.

– A confidence level.
• The confidence level describes the uncertainty of a sampling
method.
– A statistic.
• The statistic and the margin of error define an interval estimate
that describes the precision of the method.
• The interval estimate of a confidence interval is defined by
the sample statistic + margin of error.
– A margin of error.
• In a confidence interval, the range of values above and below
the sample statistic is called the margin of error.
• Margin of error = Critical value x Standard error of the
statistic
Confidence Interval to Estimate 
when s is Known

• Point estimate x
x
n
s
xz
n
• Interval
Estimate or
s s
xz    xz
n n
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 The properties of a normal distribution
• The total area under the curve is 1 (or 100%).
• 50% of the area is to the left of the mean, and 50% to the right.
• Approximately 68% of the area is within 1 standard deviation, σ, of the mean.
• Approximately 95% of the area is within 2 standard deviations of the mean.
• Approximately 99% of the area is within 3 standard deviations of the mean.

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Distribution of Sample Means
for (1-)% Confidence

 
2 2


 X

Z
Z
z 0 Zz
22 22

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Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-10
Distribution of Sample Means
for 95% Confidence

.025 .025
95%
.4750 .4750

 X

Z
-1.96 0 1.96

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8-12
Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
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Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-14
Z Values for Some of the More
Common Levels of Confidence

Confidence
z Value
Level

90% 1.645

95% 1.96

98% 2.33

99% 2.575

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• https://www.surveymonkey.com/mp/margin-of-error-calculator/
Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-16
(a) If the pollster repeats this process and constructs 20 intervals from
separate independent samples, we can expect about 18 of those intervals
to contain the true proportion of voters who support the candidate.
The stated confidence level means that we can expect ≈90% of these
intervals to contain the parameter of interest, and 18 of 20 is 90%.

(b) About 90% of people who support the candidate will respond to the
poll.

(c ) If the pollster repeats this process many times, then about 90%, of the
intervals produced will capture the true proportion of voters who support
the candidate.
Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-17
 Answer: (a)
• Confidence levels don't tell us the response rate of a poll.
• The confidence level tells us the long-term capture rate of
these intervals over repeated samples. They do not tell us
what percent of people will or won't respond to the poll.
• If the pollster repeats this process and
constructs 20 intervals from separate independent
samples, we can expect about 18 of those intervals to
contain the true proportion of voters who support the
candidate.
• If the pollster repeats this process many times, then
about 90% of the intervals produced will capture the
true proportion of voters who support the candidate.

Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-18
 ‘

Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-19
 Answer : C
• Confidence intervals give us plausible estimates for population
parameters; they don't make estimates about upcoming values of
sample statistics.
• Confidence intervals don't show the distribution of sample data; they
do give us plausible estimates for population parameters.
• A confidence interval gives us a range of plausible values for a
population parameter.
• A confidence interval doesn't estimate the sample result from an
upcoming sample, so we can't use this interval to make predictions
about the sample mean from a new sample of 100 pitches.
• A confidence interval doesn't describe the distribution of the sample
data used to build the interval, so we can't say that 95% of pitches in
the sample were between 110 and 120 km/hr.
• A confidence interval tries to capture the true value of the parameter
it's estimating, which in this case is the true mean pitch speed in the
league. The confidence level tells us the long-term capture rate of these
intervals over repeated samples.

Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons.
8-20
95% Confidence Interval for 
x  4.26, s  1.1, and n  60.

x z
s xz
s
n n
1.1 1.1
4.26 1.96    4.26 1.96
60 60
4.26  .278   
4.26  .278
3.982    4.538 8-21
 Demonstration Problem 1
x  10.455, s  7.7, n  44.
90% confidence  z  1.645

s s
xz    xz
n n
7.7 7.7
10.455  1.645    10.455  1.645
44 44
10.455  1.91    10.455  1.91
8.545    12.365

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 Demonstration Problem 2
x  34.3, s  8, N = 800, and n  50.
98% confidence  z  2.33

s N n s N n
xz    xz
n N 1 n N 1
8 800  50 8 800  50
34.3  2.33    34.3  2.33
50 800  1 50 800  1
34.3  2.554    34.3  2.554
31.75    36.85
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Confidence Interval to Estimate 
when n is Large and s is Known

x z
s

2n
or
x z
s    x z
s
 
2n n
2

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 Problem 3
x  85.5, S  19.3, and n  110.
99% confidence  z  2.575
s s
xz    xz
n n
19.3 19.3
85.5  2.575    85.5  2.575
110 110
85.5  4.7    85.5  4.7
80.8    90.2

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