CONFIDENCE INTERVALS

FOR TWO POPULATIONS

Unit 4A-2
T Motsima: 2021

PowerPoint slides from Lombard C, van der Merwe L, Kele T & Mouton A also used
 CONFIDENCE INTERVALS

• Up to this point you have learnt how to make an

interval estimation for one population.

• Confidence Interval for:

i. Population mean
ii. Population proportion
iii. Population variance

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 CONFIDENCE INTERVALS

• We are entering a point where we are going to use

Interval Estimation procedures to compare:

i. the difference between two population means

ii. the difference between two population proportions

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 CONFIDENCE INTERVALS

Content
• CI for difference between two population means for large
(n1 ≥ 30 and n2 ≥ 30) and independent samples

• CI for difference between two population means for small

(n1 < 30 and n2 < 30) and independent samples

• CI for difference between two population proportions for

large (n1 ≥ 30 and n2 ≥ 30) and independent samples

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 CONFIDENCE INTERVALS
LEARNING OUTCOME
At the end of the lecture you will be able to:

• Apply prior knowledge of inferential statistics to

develop confidence interval estimates for two
populations and make an inference.

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 CONFIDENCE INTERVALS
Confidence Interval for two populations

 1 1  2
CI ( 1 −  2 )1− =  x1 − x2  t  sp +   and  22 are unknown;
 n1 + n2 − 2;1− n1 n2 
1
 2 
n1  30 and n2  30

sp =
( n1 − 1) s12 + ( n2 − 1) s22
n1 + n2 − 2

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 CONFIDENCE INTERVALS
Confidence Interval for two populations
 s12 s22 
CI ( 1 − 2 )1− =  x1 − x2  Z  +   12 and  22 are unknown;
 1− n1 n2 
 2

n1  30 and n2  30

  12  22  2
CI ( 1 − 2 )1− =  x1 − x2  Z  +   1 and  22 are known; n1  30 and n2  30
 1− n n 
 2 1 2 

 1 1  2
CI ( 1 −  2 )1− =  x1 − x2  t  sp +   and  22 are unknown;
 n1 + n2 − 2;1− n1 n2 
1
 2 
n1 < 30 and n2 < 30

sp =
( n1 − 1) s12 + ( n2 − 1) s22
n1 + n2 − 2

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 CONFIDENCE INTERVALS
Confidence Interval

Examples:

1. Two methods of teaching Grade 10 accounting are

being compared: an old method and a new method.
The following data on test scores resulted:

Old Method
n1 = 75 x1 = 72.9 s1 = 5.5
New Method n2 = 60 x2 = 68.1 s2 = 5.1
Construct a 99% CI for the difference between the 2 population
means.
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 CONFIDENCE INTERVALS
Confidence Interval
 s12 s22 
Examples: CI ( 1 − 2 )0.99 =  x1 − x2  Z  + 
 1− n n 
 2 1 2 
 5.52 5.12 
=  72.9 − 68.1  Z 0.995 + 
 75 60 
 
= ( 4.8  2.575  0.9148 )
= ( 4.8  2.3556 )
= ( 2.4444;7.1556 )
At 99% confidence, the difference between the mean
accounting scores of the Old and New method for all
students is between 2.4444 and 7.1556 scores. 9
 CONFIDENCE INTERVALS
Confidence Interval
CI – an interval estimate for the diff between two
population means for small and independent samples

 1 1 
CI ( 1 −  2 )1− =  x1 − x2  t  sp + 
 n1 + n2 − 2;1− n1 n2 
 2

Where sp =
( n1 − 1) s12 + ( n2 − 1) s22
n1 + n2 − 2

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 CONFIDENCE INTERVALS
Confidence Interval

Example
A manufacturing company is interested in buying one of two
different brands of machines. The company tested the two
machines for production purposes. The first machine run for 10
hours. It produced an average of 123 items/hour with a SD of 9
items. The second machine was run for 8 hours, it produced an
average of 114 items per hour with a SD of 6 items.

Assume that the production per hour for each machine is

normally distributed and that the SD of the hourly production of
the two populations are equal. Construct a 95% CI for the
difference between the two population means.

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 CONFIDENCE INTERVALS
Confidence Interval

Examples:

Machine 1
n1 = 10 x1 = 123 s1 = 9
Machine 2 n2 = 8 x2 = 114 s2 = 6

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 CONFIDENCE INTERVALS
Confidence Interval
Examples:

sp =
( n1 − 1) s12 + ( n2 − 1) s22 =
( 9 ) 92 + ( 7 ) 62 = 7.8302
n1 + n2 − 2 10 + 8 − 2

 1 1 
CI ( 1 −  2 )0.95 =  x1 − x2  t  sp + 
 n1 + n2 − 2;1− n1 n2 
 2

 1 1 
=  123 − 114  t16;0.975 7.8302 + 
 10 8 
= ( 9  2.12  7.8302  0.4743)
= ( 9  7.8734 )
= (1.1266;16.8734 )
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 CONFIDENCE INTERVALS
Confidence Interval
Examples:

At a 95% confidence level, the difference between the

mean number of items produced per hour for Machine
1 and Machine 2 is between 1.1266 and 16.8734.

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 CONFIDENCE INTERVALS
Confidence Interval
CI – an interval estimate for the diff between two population
proportions for large and independent samples

p1 (1 − p1 ) p2 (1 − p2 )
CI ( 1 −  )
2 1− = ( p1 − p2 )  Z  +
1− n1 n2
2

x1 x2
p1 = p2 =
n1 n2

p1 (1 − p1 ) p2 (1 − p2 )
CI (1 −  2 )1− = ( p1 − p2 )  t  +
n1+ n2 − 2;1− n1 n2
2

z – when n1 ≥ 30 & n2 ≥ 30
t – when n1 < 30 & n2 < 30 15
 CONFIDENCE INTERVALS
Confidence Interval

Examples According to the Bureau of Census, 66% of

single female households and 81.9% of single male
households own cars. Assume that these estimates are
based on random samples of 1 640 single female
households and 1 800 single male households.

Determine a 99% confidence interval for the difference

between the two population proportions.

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 CONFIDENCE INTERVALS
Confidence Interval

Examples:
Female households n2 = 1640 p2 = 0.66

Male households n1 = 1800 p1 = 0.819

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 CONFIDENCE INTERVALS
Confidence Interval

Examples:
 p1 (1 − p1 ) p2 (1 − p2 ) 
CI ( 1 −  2 )1− =  p1 − p2  Z  + 
 1− n1 n2 
 2 
 0.819 (1 − 0.819 ) 0.66 (1 − 0.66 ) 
=  0.819 − 0.66  Z 0.995 + 
 1800 1640 
 
(
= 0.159  2.575  0.0002 )
= ( 0.159  0.0363)
= ( 0.1209; 0.1971)

At 99% confidence level, the difference between the two

population proportions is between 0,1209 and 0,1971.
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CONFIDENCE INTERVALS

THANK YOU

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 REFERENCES

1. Lombard C, van der Merwe L, Kele T and

Mouton S. 2012. Elementary Statistics for
Business and Economics.

2. Trevor Wegner. 2006. Applied and Business

Statistics: Methods and Applications.

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