Confidence intervals

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 Point and interval estimators
There are two kind of estimators:
• Point
• Interval

Point estimator: single statistics used for estimate

a parameter of the population. Sample mean is a
point estimator for the mean of the population ,
sample variance is a point estimator for the
variance of the population 2, ecc.

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 Point and interval
estimators

Interval estimator: interval of values that has a

certain probability or confidence to contain the
true value of the parameter of the population.

The level of confidence is usually (1-)% where 

is the probability that the value stays in the tails of
the distribution, outside the confidence interval.

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 Confidence interval for the mean
known σ of the poplulation

When the population is normally distributed, the distribution

of the mean is also normal

When population variable X is normally distributed and

is known, a 100(1 − α)% confidence interval for μ is given by

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 Confidence interval
Normal curve for Z
with a level of
confidence of 95%

Normal curve for Z

with a level of
confidence of 99%

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 Example
•Bolts produced from a firm have an unknown mean diameter, its
variance is 0.01. We keep a sample of n=1000 bolts and we
observe a mean diameter of 1.2 cm. Find the confidence interval at
99% with a fixed level of confidence of 99%.
•1-α=0.99→ α=0.01 → α/2=0.005 →1-α/2=0.995
•From table of Normal distribution Z(0.995) =2.576
•So the interval is

 0.01 0.01 
1.2  2.576 ;1.2  2.576   1.1918;1.2081
 1000 1000 
 Confidence interval for the mean
unknown σ of the population

Given that σ is not know we need to use its estimator s.

If we consider the ratio
X 
t
S
n

then the random variable t has the Student’s t distribution with

n − 1 degrees of freedom.
A 100(1−α )% confidence interval for μ is given by

where tα/2 is the upper α/2 point of the Student’s t distribution with
n − 1 degrees of freedom.

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 Confidence interval for the mean
unknown σ of the population

If n is very large the t distribution is very close to a Normal distribution.

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 Confidence interval for the mean
unknown σ of the population

The table of the Student’s t distribution give the probability (area) on the right
of the indicated value.