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interval
A range of values so defined that there is a
specified probability that the value of a
parameter lies within it.
Statisticians use aconfidence interval to describe
the amount of uncertainty associated with a
sample estimate of a populationparameter.
An interval estimate provides more information
about a population characteristic than does a
point estimate. It provides a confidence level for
the estimate. Such interval estimates are called
confidence intervals
single number
Point estimationrefers to the process
ofestimatinga parameter from a probability
distribution, based on observed data from the
distribution.
An interval estimate provides more
information about a population characteristic
than does a point estimate
Lower
Confidence
Limit
Upper
Point Estimate
Width of
confidence interval
Confidence
Limit
when
is known
Assumptions
Population standard deviation is known
Population is normally distributed
If population is not normal, use large sample
x X Z
n
(where Z is the normal distributions critical value for a
probability of /2 in each tail)
1 .95
.05
.475
.025
2
Z= -1.96
Lower
Confidence
Limit
/ 2 .025
.475
0
Point
Point Estimate
Estimate
.025
2
Z= 1.96
Upper
Confidence
Limit
Example :-
t Distribution :
X t n -1
S
n
Z dist.
Compare to Z dist., a larger portion of the probability
areas are in the tails.
As n increases, the t dist. approached the Z dist.
t values depends on the degree of freedom.
Students t distribution
Note: t
Z as n increases
Standard
Normal
t (df = 13)
t-distributions are bell-shaped
and symmetric, but have
fatter tails than the normal
t (df = 5)
Definition of proportion
The point estimate for p, the population
proportion of successes, is given by the proportion
of successes in a sample and is denoted by:
x
p
n
x 380
p
0.43 43%
n 883
p E p p E
Definition
A c-confidence interval for the population
proportion p is
p E p p E
where
E zc
p q
n
Cont.
Using zc = 1.96, the maximum error of estimate
is:
E zc
p q
(0.43)(0.57)
1.96
0.033
n
883
0.397 p 0.463
So, with 95% confidence, you can say that the proportion of