WEEK 11

Inferences about a population mean

Lecturer: Sanjar Mardonov

Lecture Outline

1. Point and interval estimation

2. Choosing the right sample size
3. Finding a confidence interval for µ.
4. Hypothesis testing for µ.
5. p-value in hypothesis testing
Statistical inference
Statistical Inference
Methods for making inferences about population mean, μ:
1. Estimation of parameter (point or interval estimate)
Examples:
• “What is the average age in Uzbekistan”?
• “How much time do millennials spend watching TV news a day?”
• “What is the average cost to spend a month in Hawaii?”

2. Hypothesis testing
Examples:
• “Is the average age in Uzbekistan more than 30 years?”
• “Do millennials watch TV news less than 15 minutes a day?”
• “Is average cost to spend a month in Hawaii is more than $6000?”
Estimation
Estimationof parameters
of parameters
A single number calculated from the sample that estimates a target population parameter is called a point
estimator.
Interval estimator - a range of numbers that contain the target parameter with a high degree of
confidence.
Interval estimate
Point estimate
I am 95% confident
that  is between
Mean, ,20
is & Mean 40
unknown
X = 30

SAMPLE
Confidence
ConfidenceInterval
Interval

Suppose we have a population with unknown .

• 100(1-)% Confidence Interval for , 

known. 
𝑥̅  z/2*
𝑛
Here,  - significance level, e.g. 0.05, 0.10, etc.
Margin of Error (E or ME)

• 100(1-)% Confidence Interval for ,  unknown.

If the sample size is large (at least 30), we can replace  with s (sample
standard deviation)
s
𝑥̅  z/2*
𝑛
Estimation
Exercise of parameters
8.1
Laptop use in middle school

For a sample of 106 students, the researchers reported the following statistics on how many
minutes per day each student used a laptop for taking notes: x* = 13.2, s = 19.5. Now the
researchers want to estimate the average amount of time per day laptops are used for taking
notes for all middle school students across the country.

Calculate a 95% confidence interval for the

average usage of laptop in middle schools.
Exercise
Solution8.1 to Exercise 8.1
Since sample size is large (n = 106), and population standard deviation is
unknown, we substitute  with s.  = 0.05 for 95% Confidence Interval
s
𝑥̅  z/2* z/2 = 1.96
𝑛

13.2  1.96* 19.5

+06
( 9.49; 16.91) minutes
Interpretation: We are 95%
confident that average usage of
laptops in middle school lies 0.95 /2 = 0.025
/2 = 0.025
between 9.49 and 16.91
minutes.
Solution
SampletoSize
Exercise 8.1
to Estimate a Population Mean

Here,
z – z/2 , obtained from z table
E – margin of error
n must be rounded up in
order not to exceed the
specified margin of error.
Sample Size to Estimate a Population Mean
Solution
The maximum allowable margin of error, E (or ME), is $100. The value of z/2 for a
95% level of confidence is 1.96, and the standard deviation is $1000.
Substituting these in the formula:
n = (+./6∗+000
+00
)2= (19.6)2 = 384.16
After rounding it up, we get 385, that is the required sample size to meet the
specifications.
Solution
Hypothesis Testing
A hypothesis is an assumption about the population parameter.
The Null Hypothesis, H0 – general statement or default position that there is nothing new
happening.
Refers to the Status Quo.
Always contains the “=” sign.

The Alternative Hypothesis,

Ha
Opposite of the null hypothesis.
Challenges the Status Quo.
Never contains the sign “=”.
Hypothesis
Steps ofTesting
hypothesis testing
Step 1. State null and alternative hypotheses:
Case 1. Two-sided Case 2. Left-sided Case 3. Right-sided
H 0:  = 0 H 0:   0 H 0:   0
H a :   0 H a :  < 0 H a :  > 0

Step 2. Calculate the test statistic, denoted as T.S. (in this case zstat):

z stat = 𝑥̅–/ 𝑛0 ( this is obtained from sample data)

Step 3. Formulate the decision rule:

Reject H0 if:
Case 1. |zstat|  z/2 Case 2. zstat  -z Case 3. zstat  z

Find critical z (z/2 or z) from the standard normal table (z table).
Steps
Stepsof hypothesis testing
of hypothesis testing
Step 4.
Make a decision.
Either reject Ho or fail to (do not) reject Ho based on comparison on step 3.
Interpret the result.
Provide your final conclusion in the context of the research question.
Exercise
Exercise8.2 8.2
Suppose you are looking for a two-bedroom apartment for rent. Local website www.olx.uz claims average
cost of rent for two-bedroom apartments is $400 in Tashkent. But you suspect the real number is higher than
$400. So you randomly selected 36 two-bedroom apartments from that website and calculated sample mean
to be $415 and sample standard deviation to be $55. Use  = 0.10.
Conduct a hypothesis test to see whether rent rate is higher than $400.
Solution.
Step 1. State null and alternative hypotheses:
H0:   400
H a:  >
400
=
𝑥̅ – 0
=
415 − 400 = 1.636
Step 2.
T.S. z stat
/ 𝑛 55/ : 6
Calculate the
test statistic.
Solution
Solutionto Exercise 8.2
to Exercise 8.2
Step 3. Formulate the decision rule.
We reject Ho if zstat  z
z = z0.10 = 1.28
Step 4. Make a
decision and interpret
the result.
Since zstat = 1.636 > z = 1.28, we reject
H0. There is a sufficient evidence to claim
average rent in Tashkent is greater than $400.
p-value
p-value

Decision rule: Reject Ho if p-value  

This is a universal rule for many statistical tests.

Refer to the previous example.

zstat = 1.636
p-value = P(z > 1.636) = P(z < -
1.636) = 0.0505 <  = 0.10
So we reject the null hypothesis.
The conclusion remains the same.
Reference
Reference
1. Lind et al (ISBN 978-1-260-18750-2), Chapter 9&10.
2. McClave & Sincich (ISBN 978-0-321-75593-3), Chapter 7 & 8.
3. Ott & Longnecker (ISBN 978-0-495-01758-5), Chapter 5.
THE END

Thank you for your attention!