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Module 2 - Lesson 4 & 5 - With Soln

The document discusses point and interval estimation. It defines key terms like point estimator, confidence interval, margin of error, and level of confidence. Examples are provided to illustrate how to construct 95% and 99% confidence intervals for a mean using the sample mean, standard deviation/error when the population standard deviation is known or unknown.

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OKARU
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Download as PDF, TXT or read online on Scribd
32 views

Module 2 - Lesson 4 & 5 - With Soln

The document discusses point and interval estimation. It defines key terms like point estimator, confidence interval, margin of error, and level of confidence. Examples are provided to illustrate how to construct 95% and 99% confidence intervals for a mean using the sample mean, standard deviation/error when the population standard deviation is known or unknown.

Uploaded by

OKARU
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Lesson 4

Point and Interval Estimation


Basic Concepts in Estimation
ILLUSTRATION:
• Suppose that the dean of a certain private school wants to
estimate the mean IQ of her student body without having to go
through the time and expense of administering tests to all 1,000
students. Instead, she selects 25 students at random and gives
them the test. She finds that the mean for her sample is 105.
Basic Concepts in Estimation
• The sample mean of 105 can be used as an estimate of μ.
• This kind of estimate is called a point estimate, since it consists of a
single number, or a single point on the real number scale.
• Although this is the most common way in which estimates are
expressed, it leaves room for many questions:
- it does not tell us on how much information the estimate is
based.
- it does not provide information about the precision of the
estimate.
- we are not sure if is actually reflective of the student
population, because sampling error is the inevitable product of
only taking a portion of the population.
Basic Concepts in Estimation
• So what we want is a point estimate with a precision.
• And this is the concern of Interval Estimation

PROBLEMS ADDRESSED BY INFERENTIAL


STATISTICS :
ESTIMATION is concerned with finding a value or range of
values for an unknown parameter.
TEST OF HYPOTHESIS deals with evaluating a claim or a
conjecture about a parameter or distribution of the
population.
Basic Concepts in Estimation

Population Random Sample


I am 95%
Mean confident that
Mean, µ, is
X = 50 µ is between
unknown
40 & 60.

Sample
Basic Concepts in Estimation
POINT ESTIMATION
• The best point estimate of μ is the sample mean ( ).
• The most frequently used estimator of the population standard
deviation (σ) is the sample standard deviation (s).
• The proportion of elements that possess a particular characteristic in a
given population, denoted by P, is best estimated by the sample
proportion ( ̂ ).
Basic Concepts in Estimation

POINT ESTIMATOR – is a formula that gives


a single value in estimating a parameter.
Basic Concepts in Estimation

EXAMPLE:
A random sample of 400 households with a TV set was used to determine
the proportion of households that viewed Showtime one Monday
afternoon. It was found that 123 households were tuned to the show that
day.
Thus, could be used as an estimate of the proportion of
households with a TV set that viewed Showtime that day.
Basic Concepts in Estimation
INTERVAL ESTIMATION
• A point estimate has the limitation that it does not provide information
about the precision of the estimate.
• A point estimate with a precision is the concern of interval estimation.
• An interval estimation is:
 a formula that gives a range of values for estimating a parameter.
 constructed from the sample data.
 attached to it is a “degree of confidence” of a predetermined
probability.
The general format for a confidence
interval (CI) is:
point estimate ± margin of error

The margin of error is a multiple of


the standard error (SE), i.e. the
standard deviation of the sampling
distribution.
Lesson 5
Estimating the Mean
Estimating the Mean
CONFIDENCE INTERVAL FOR THE MEAN
• How do we construct the confidence interval for the
mean?
point estimate ± margin of error

Standard error of the


Mean
Estimating the Mean
LEVEL OF CONFIDENCE

1-α

μ
The probability is 1 - α that the mean of a large random sample
from an infinite population will differ from the mean of the
population by at most

The two values which are most commonly used for 1 - α are
0.95 and 0.99.

(0.95) 100 = 95% LEVEL OF


(0.99) 100 = 99% CONFIDENCE
95% Level of Confidence
α = 5% and α/2 = 0.025, thus

99% Level of Confidence


α = 1% and α/2 = 0.005, thus
Case 1: σ is unknown and n≥ 30
• Assumption: Population is normally distributed

• Confidence Interval Estimate


EXAMPLE:
1) The mean and standard deviation for the quality point indices (QPI) of a
random sample of 36 sophomore students are 2.6 and 0.3, respectively.
Find the 95% and 99% confidence intervals (CI) for the mean of the
entire sophomore batch.

Solution:
Solution:
EXAMPLE:
2. A smoking researcher is interested in estimating the average age when
cigarette smokers first began to smoke. Taking a random sample of 50
smokers, she determines a sample mean of 16.8 years and a sample
standard deviation of 1.5 years. Construct a 95% confidence interval to
estimate the population mean age of the onset of smoking.

Solution:
Solution:
Case 2: σ is unknown and n < 30
• Assumption: Population is normally distributed

• Confidence Interval Estimate

df = n – 1
Example:
1. The contents of 8 similar bottles of acetic acid are 110, 112, 111, 109,
107, 113, 110, and 109 milliliters. Find a 95% confidence interval for the
mean of all such bottles, assuming an approximate normal
distribution for the population of the acetic acid contents.

Solution:
Solution:
Example:
2. An electrical firm manufactures light bulbs that have a length of life
that is normally distributed. If a random sample of 25 bulbs has a
mean life of 780 hours and a standard deviation of 40 hours, find the
99% CI for the population mean of all bulbs produced by this firm.

Solution:
Solution:

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