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PRESENTED BY : PRAVEEN KR. SINGH(M/34) RAHUL PANDEY(M/37) SHIVENDER BHARGAV(M/51) U.PRABIR JAISWAL(M/61) ASHUTOSH SHARMA(M/67)

ESTIMATION

AN ESTIMATE IS A VALUATION BASED ON OPINION OR ROUGHLY MADE FROM IMPERFECT OR INCOMPLETE DATA. WE STUDY ESTIMATES SO THAT WE CAN LEARN ABOUT POPULATION BY SAMPLING, WITHOUT COUNTING EVERY ITEM IN THE POPULATION

**CRITERIA OF A GOOD ESTIMATOR
**

UNBIASED EFFICIENCY CONSISTENCY SUFFICIENCY

TYPES OF ESTIMATES

POI I I POPULATION I : POI I I OF PARAMETER

INTERVAL ESTIMATE: AN INTERVAL ESTIMATE ESCRI ES A RANGE OF VALUES ITHIN HICH A POPULATION PARAMETER IS LIKELY TO LIE.

**Population Parameters Estimated
**

Estimate Population Parameter... Mean Q Proportion Variance p W

2

_

**with Sample Statistic _ X ps
**

2

s

_

Confidence Intervals

W X s Z yW X ! X s Z y n

_ Wx

_ X

Q 1.645W x

Q 1.96W x

Q 1.645W x

Q 1.96W x

90% Samples

95% Samples

Q 2.58W x

99% Samples

Q 2.58W x

**Confidence Interval Estimates
**

Confidence Intervals

Mean

Proportion

Finite

W

Known

Population

CASE ONE

FROM A POPULATION OF 140007531 ,A SAMPLE OF 37 YEARS IS TAKEN. FROM THIS SAMPLE THE MEAN IS FOUND TO BE 94.9726 , AND THE STANDARD DEVAITION 125.03. 1. FIND THE ESTIMATED STANDARD ERROR OF THE MEAN. 2. CONSTRUCT 95% CONFIDENCE INTERVAL FOR THE MEAN 3. CONSTRUCT 99% CONFIDENCE INTERVAL FOR THE MEAN.

SOLUTION :

HERE, STANDARD ERROR STANDARD DEVIATION MEAN POPULATION = = = = 20.55 125.03 94.9726 140007531

AT 95% CONFIDENCE LEVEL, VALUE WILL LIE BETWEEN 54.72 TO 135.24 AT 99% CONFIDENCE LEVEL, THE VALUE WILL LIE BETWEEN 41.96 TO 147.98

CASE TWO(2)

Find a 95% confidence interval for

p, the proportion of small businesses in favor of a tax increase to decrease the national debt, if a random sample of 1000 found the number of businesses in favor of increased taxes was 50.

Solution

Ö p ! 50 1000 Ö ! .05, so q ! .95and the confidence interval is (.05)(.95) .05 s 1.96 = .05 s .014 1000 (.036, .064)

Interpreting Confidence Intervals

Correct: We are 95% confident that the interval from .036 to .064 actually does contain the true value of p. This means that if we were to select many different samples of size 1000 and construct a 95% CI from each sample, 95% of the resulting intervals would contain the value of the population proportion p. (.036, .064) is one such interval. (Note that 95% refers to the procedure we used to construct the interval; it does not refer to the population proportion p)

WRONG: THERE IS A 95% CHANCE THAT THE POPULATION PROPORTION P FALLS BETWEEN .036 AND .064. (NOTE THAT P IS NOT RANDOM, IT IS A FIXED BUT UN NOWN NUMBER)

CASE 3 (THREE)

THE AVERAGE MONTHLY ELECTRICITY CONSUMPTION FOR A SAMPLE OF 100 FAMILIES IS 1250 UNITS. ASSUMING THE STANDARD DEVIATION OF ELECTRIC CONSUMPTION OF ALL FAMILIES IS 150 UNITS, CONSTRUCT A 95 PERCENT CONFIDENCE INTERVAL ESTIMATE OF THE ACTUAL MEAN ELECTRIC CONSUMPTION.

THE INFORMATION GIVEN IS :

CONFIDENCE LEVEL (1- )= 95 PERCENT. AT 95 % CONFIDENCE INTERVAL, Z= 1.96

X ± z /¥n =1250 ± 1.96 *150/¥100=1250±29.40

Thus for 95% level of confidence,the population

mean is likely to fall between 1220.60 units and 1274.40 units ,that is, 1220.60 1274.40

CASE (FOUR)

A SMALL LOCAL BAN HAS 1450 INDIVIDUALS SAVINGS ACCOUNTS WITH AN AVERAGE BALANCE OF RS 3000 AND A STANDARD DEVIATION OF RS 1200.IF THE BAN TA ES A RANDOM SAMPLE OF 100 ACCOUNTS, WHAT IS THE PROBABILITY THAT THE AVERAGE SAVINGS FOR THESE 100 ACCOUNTS WILL BE BELOW RS 2800.

SOLUTION

= -1.73

**CASE(FIVE) Sample Size for Mean
**

What sample size is needed to be 90%

**confident of being correct within ± 5? A pilot study suggested that the standard deviation is 45.
**

2 2 2 2 2 2

n!

Z W

. 1645 ! 5

45

Error

! 219.2 $ 220

Round Up

CASE(SI ) Sampl Siz f r Pr portion

What sample size is needed to be within ± 5 with

90% confidence? Out of a population of 1,000, we randomly selected 100 of which 30 were defective. Z p( 1 p ) 1.645 (.30 )(.70 ) n! ! ! 227.3 2 2 error .05

2 2

$ 228

Round Up

SOURCES

TOYOTA MOTORS(SALES AND PRODUCTION)

<F

STATISTICS AND ECONOMETRICS BY- DOMINICK SALVATORE BUSINESS STATISTICS BY- J.K. SHARMA STATISTICS FOR MANAGERS BY- LEVINE,BERENSON

by prabir jaiswal

by prabir jaiswal

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