9.

0 Estimation of a Random Variable’s possible value

When we have collected data from an experiment, we can now use

statistical estimation to determine the likely value of such variable
when a future observation is to be performed.

Statistical inference consists of using methods by which one

makes inferences or generalizations about a population.

1. Point Estimator = a rule or formula that tells us how to

calculate an estimate based on the measurements contained in
a sample. The number that results from the calculation is called
a point estimate.
Interval Estimator = a formula that tells us how to use sample
data to calculate an interval that estimates a
population parameter .

Estimation Formulas and applied problems

A. Estimating the mean

x
A.1 Case 1: x known X  Z 2
n

(1) The quality control manager at a light bulb factory needs to

estimate the average life of a large shipment of light bulbs. The
process standard deviation is known to be 100 hours. A random
sample of 50 light bulbs indicated a sample average life of 350
hours.
a. Set up a 90% confidence interval estimate of the true average life
of light bulbs in this shipment.
b. Set up a 95% confidence interval estimate of the true average life
of light bulbs in this shipment.
c. Tell why an observed value of 320 hours would not be unusual even
though it is outside the confidence interval you calculated.

s
A.2 Case 2: x not known X  t
2 n

(2)The Director of Quality of a large health maintenance

organization wants to evaluate patient waiting time at a local
facility. A random sample of 25 patients selected from the

Estimation Theory. page 128

 appointment book. The waiting time was defined as the time
from when a patient signed in to when he or she was seen by
the doctor. The following data represent the waiting time (in
minutes)

19.5 30.5 45.6 39.8 29.6

25.4 21.8 28.6 52.0 25.4
26.1 31.1 43.1 4.9 12.7
10.7 12.1 1.9 45.9 42.5
41.3 13.8 17.4 39.0 36.6
Set up a 95 % confidence interval estimate of the population
average waiting time.

B. Estimating the difference between two means (1-2)

 12  2 2
B.1 Case 1: Large independent samples ( x1  x 2 )  Z 
2 n1 n2

(3) It is desired to estimate the difference between the mean starting

salaries for all bachelor’s degrees graduates of DLSU in the
Colleges of Engineering and Computer Science during the past
year. The following information is available from the Career
Development Office:
 A random sample of 40 starting salaries for Engineering
graduates produced a sample mean of P230,500 and a
standard deviation of P38,515.
 A random sample of 30 starting salaries for CompSci graduates
produced a sample mean of P192,000 and a standard
deviation of P35,452.
Construct a 95% confidence interval for the difference between
mean starting salaries for graduates of the two colleges. Interpret
the interval.

B.2 Case 2: Small independent samples with equal variances

2 2
1 1 ( n1  1 )S1  ( n2  1 )S 2
( x1  x 2 )  t  S p    where S p 
2  n1 n2  n1  n2  2
value of t/2 is based on (n1+n2-2) degrees of
freedom

Estimation Theory. page 129

 (4) The Farm has received claims from its customers that the
weight of point-of-sale adult pigs from its two farms are different
by at least 5 kgs. The resident veterinarian decided to check
the validity of this claim. He took 10 pigs from each farm’s
available pigs for sale, and the following data was found.
Farm Farm
1 2
sample size 10 10
pigs pigs
Mean weight 90.5 85.0
standard deviation 3.2 3.4
of wts

a. Is the claim valid at 5% level of significance ?

b. Estimate a 95 % confidence interval for mean difference in pig
weights between those of farm 1 and those of farm 2.

B.3 Case 3: Small independent samples with unequal variances

2 2
s1 s
( x1  x 2 )  t   2 where the distribution of t/2 has degrees of
2 n1 n2
freedom 
2
 s12 s22 
  
 n1 n2 

 s22  The value of should be rounded down to nearest
2 2
 s12 
   
 n1   n2 

n1  1 n2  1
integer.

(5) You’re trying to determine if a new route from your house to

school would save you at least 10 minutes of travelling time. You
recorded 4 weeks’ travelling time using the two different routes and
your data showed:

Mean travel Std

time deviation
Old Route (13 55.2 minutes 5.2
times) minutes
New Route (7 42.7 minutes 10.3

Estimation Theory. page 130

 times) minutes

Estimate a 90 % confidence interval of the difference in travelling

times if you took the new route instead of the old one.

B.4 Case 4: Matched pairs (Dependent samples)

Let d1, d2 .. dn represent the differences between pairwise observations

in a random sample of n matched pairs. Then the small sample
confidence interval for d=(1-2) is

S 
d  t  d  where d and Sd are the mean and std.dev. of the n
2 n

sample differences.

(6) A new diet program called !Give It Up! claims to be effective in

taking out the unwanted pounds off of obese people. As a
benchmark to compare against, you used the Pritikin program.
You randomly selected 30 people’s and acquired their body weights
before and after each program. The following table shows the
data.
Construct a 95% confidence interval for the mean weight loss
under each program.

!Give It Before After Pritikin Before After

Up! person
person
1 100 70 kgs 1 124 kgs 70 kgs
kgs
2 124 85 2 115 81
3 115 80 3 125 68
4 125 84 4 115 80
5 115 89 5 85 84
6 112 75 6 84 89
7 105 85 7 75 75
8 112 85 8 125 85
9 108 92 9 115 92
10 95 75 10 105 75
11 85 70 11 112 70

Estimation Theory. page 131

 12 84 81 12 108 81
13 75 68 13 95 68
14 80 64 14 85 64
15 96 75 15 96 75

( n  1) s 2 (n  1) s 2
C. Estimating the variance 2 
2
 21
2  2 

(7) Construct a 95 % CI on the variance based on the following set of

data (the amount of Krypton gas (in milliliters) that leaked out each
time its container was dropped from 4 ft above ground):

15.5 16.8 16.7 15.4 16.4 17.5

17.8 17.5 18.3 14.5 18.1 15.7
19.5 18.6 19.7 15.8 18.2 16.8

D. Estimating the ratio of two variances

s12 1   12  s12 1
   2 2  

s2 F  1, 2
2

2
  2 
  2  s2 F 1  1, 2

s12 1   12  s12
      F 2   2 , 1 
s22 F   1, 2    22  s22
2

(8) An investor wants to compare the risks associated with two

different computer stocks, IBM and PhilCom, where the risk of a
given stock is measured by the variation of daily prices. The
investor obtains random samples of daily price changes for IBM
and PhilCom. The sample results are summarized in the
accompanying table. Compare the risks associated with both
stocks by forming a 95 % c.i. for the ratio of the true population
variances.

IBM PhilCom
n1 =21 n2 = 21
X1 = 0.585 X2 = 0.572
S1 = 0.023 S2 = 0.014

p q
E. Estimating a proportion p  Z
2 n

Estimation Theory. page 132

(9) In a recent employee satisfaction survey made by J.Rizal
Industries, 356 out of 400 employees stataed that they were very
satisfied or moderately satisfied with their jobs. Create a 95% c.i.
estimate of the population proportion of the employees who were
satisfied with their jobs.

F. Estimating the difference between two proportions

p1  q1 p2  q 2
 p1  p2   Z 2 
n1 n2

(10) In a controversial survey of dating preferences made at the

University of the Philippines in 1992, 305 out of 500 students
surveyed claimed “Good Conversationalist” as the one of the most
preferred trait of a dating partner. Furthermore, 175 out of 500
claimed “sexual attractiveness” as the most important trait.
Estimate the difference between the proportions of the UP
studentry who preferred good talk over good looks at a 90%
confidence level.

G. Test for Goodness of Fit between a hypothesized

Distribution and actual data

Hypothesis: Data follows the hypothesized value.

Test statistic formula:

Where
k
 oi  e i  2
 
2

ei
i 1

where oi = observed frequency of the ith interval cell (i=1 to

k)
ei = expected frequency according to the hypothesized
distribution
= Total N x (Probability Pi for ith interval.)
= N Pi

Decision: Reject the hypothesis if X 2 > X2,k-1 value on chi-squared

distribution table with probability of error  and degrees of
freedom = k-1.

Example:

Estimation Theory. page 133

 A die is to be tested if each side occurs as equally frequent as
the others. To do this, 100 throws of the die was made and the
number of occurrences per side were recorded.
X 1 2 3 4 5 6
Frequenc 2
y 12 10 15 16 22 5

Can we say with a 5% probability of error (or 95% confidence) that the
die results follow a uniform distribution?

PRACTICE PROBLEMS:

1. The production records for an automobile manufacturer show the following figures for production
per shift.
688 700 691 679
656 701 694 703
711 702 664 708
677 688 630 688
625 688 688 699
703 667 547 697
a. Give a 95% confidence interval for the production output (cars, in
this case)
b. Give an 95% confidence interval for the standard deviation of
production output that should be known to occur.
c. What proportion of the shifts should you expect to produce 680
cars or more? Give a 95% confidence interval for this proportion.

2. A single leaf was taken from each of Luciano Tang’s tobacco plants.
Each was divided in half; one half was chosen at random and
treated with preparation I and the other received preparation II.
The object of the experiment was to compare the effects of the two
preparations of mosaic virus on the number of lesions of half
leaves after a fixed period of time. For a 5% level of significance,
examine the research hypothesis that the lesions that occurred
from different preparations are significantly different. You can do
this by making a confidence interval of the differences between
each prep.

Plant 1 2 3 4 5 6 7 8 9 10 11
Prep I 1 2 9 14 38 26 15 1 25 7 13
8 0 0
Prep II 1 1 6 12 32 30 9 2 18 3 6

Estimation Theory. page 134

 4 5

3. DJC Video Stores wants to know how long it takes for its customers
to check-out a video rental. Suppose that you are to obtain a
random sample of 20 video checkout times (in minutes) . The
following table showed the ordered sequence of data collected:
(read the data by row)
Day 1.12 2.76 3.81 4.91 1.28 5.06 5.67 6.00
1
Day 3.79 4.54 10.2 12.4 7.16 18.1
2 8 5 2
Day 1.19 0.85 2.15 15.7 1.75 5.12
3
Treat each problem below independently. Using a 0.05 level of
significance :
a. Assuming normality, give an interval estimate of the time it
takes for a customer to check out videos.
b. Assuming normality, give an interval estimate the proportion
of customers who check out within 3 minutes.

4. Louie wore XXL sized clothes in June 2002. Today, he can

consider himself normal Large sized (Size L). He shows you a
month-by-month record of his body weight for the past year. He
always weighed himself at the beginning of each month. He wants
your opinion on certain statistical claims. He started on a diet
program September 1.

Month June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May
Weight 220 216 215 210 206 200 192 187 181 172 162 155
a. Give a 90% confidence interval for the month-to-month
differences in his weight since he started on the diet program.
b. Has his average monthly weight significantly changed since
he started with the program? Compare his average weight
before the program and his average weight after the
program. Use a=0.05 Is there a significant reduction?

Estimation Theory. page 135