Point and Interval Estimates

• A point estimate is a single number

• A confidence interval estimate is a range of numbers around

the point estimate

Lower Upper
Confidence Confidence
Point Estimate Limit
Limit
Width of
confidence interval
Point Estimates

We can estimate a with a Sample

Population Parameter … Statistic
(a Point Estimate)

Mean μ X
Proportion π p
Confidence Interval Example
Sanitarium example

• Population has µ = 505 and σ = 20.

• If you take a sample of size n = 35 you know (by CLT) that:
20
501 ± 1.96 ∗ = (498.37, 511.63) contains 95% of the possible sample means when n = 35.
35

• When you don’t know µ, you use 𝑋𝑋� to estimate µ

20
• If, for one sample, 𝑋𝑋� = 510 then this interval is: 510 ± 1.96 ∗ = (503.37, 516.63)
35

• Since 503.37 ≤ µ ≤ 516.63 this interval contains the true µ.

But what about the intervals from other samples of size 35?
Confidence Interval Example
95% intervals

Lower Upper Contains

Sample # X
Limit Limit µ?
1 510 503.37 516.63 Yes

2 507.74 501.11 514.37 Yes

3 509.39 502.76 516.02 Yes

4 497.91 491.28 504.54 No

5 511.12 504.49 517.75 Yes

95% Confidence Intervals

Sampling Distribution of the Mean

Note: 95% confidence is
based on using Z = 1.96 here.
0.025 0.95 0.025

−1.96 1.96 x
Intervals go from μx = μ
x1
σ
�
𝑋𝑋 − 1.96
n x2
95% of intervals contain μ;
to
5% do not.
σ
𝑋𝑋� + 1.96
n

Confidence Intervals
General Formula for a confidence interval

Point Estimate ± (Critical Value)(Standard Error)

Where:
• Point Estimate is the sample statistic estimating the population parameter of interest

• Critical Value is a value based on the sampling distribution of the point estimate and the
desired confidence level

• Standard Error is the standard deviation of the point estimate

Estimation Process

Random Sample I am 95%

confident that μ
is between 40 &
Population Mean 60.
(mean, μ, is X = 50
unknown)

Sample