10 Estimation of Proportion

PARAMETER ESTIMATION
(POPULATION PROPORTION)
PROPORTION
 Population proportion (p)- is the ratio of the number of units
possessing a characteristic to the total number of units in the
population
Example: Proportion of learners who passed Mat02 quiz 2.
 can be expressed as fractions, decimals, or percentage

 can also represent probabilities
 can be obtained from samples or populations

NOTATION FOR PROPORTION
 For a sample proportion:
or
 where
PROPORTION
Example:
In a recent survey of 150 households, 54 had central air
conditioning. Find and , where is the proportion of
households that have central air conditioning.
Solution:
POINT ESTIMATE
 The best point estimator of the population proportion
is the sample proportion
 with standard error equal to
 with sufficient sample size , the sampling distribution
of the sample proportion could be approximated by
the standard normal distribution based on the CLT
Example
A survey is conducted to determine the opinions of people

on global warming. In a random sample of 150 people, 108
think that global warming is a serious world problem.
1. Estimate the proportion of adults who think that global

warming is a serious world problem.
2. What is the standard error of this estimate?

POINT ESTIMATE OF THE POPULATION
PROPORTION
Solution:
1. The best estimator of the population proportion is
the sample proportion
2. Standard error of this estimate

CONFIDENCE INTERVAL ESTIMATE
 When the sample size is sufficiently large ( and ),
confidence intervals for the population proportion
can be constructed in a similar procedure as that of a
confidence interval for population mean .
CONFIDENCE INTERVAL FOR A
PROPORTION
 A confidence interval of the population proportion is
constructed as
 Where the maximum error (or margin of error) is

CONFIDENCE INTERVAL ESTIMATE
Example:
The laundry soap industry conducted a market research survey on
consumer preference in Metro Manila. The survey showed that 138
out of 300 persons preferred the laundry powder brand Olla.
1. What is the best point estimate for the true proportion of
consumers preferring Olla in Metro Manila and find its standard
error?
2. Construct a 99% confidence interval for the proportion of
consumers in Metro Manila that prefer Olla.
3. If less than 50% of the consumers prefer Olla, the industry is
planning to increase its advertising budget for this product. Is
there a need to increase its advertising budget for this brand?
Why?
PROPORTION
Solution:
1. The best point estimate for the true proportion of
consumers preferring Olla in Metro Manila is given
by
Its standard error is

PROPORTION
Solution:
2. A 99% confidence interval for the proportion of
consumers in Metro Manila that prefer Olla is given
by
PROPORTION
Solution:
3. Since 50% is contained in the 99% confidence
interval of [38.59%, 54.31%], then the true
proportion of consumers who prefer Olla laundry
powder in Metro Manila is not significantly different
from 50%. Thus, there is no need to increase the
advertising budget for this brand.
PROPORTION
Try this!
A survey conducted by Sallie Mae and Gallup of 1404
respondents found that 323 students paid for their
education by student loans. Find the 90% confidence of
the true proportion of students who paid for their
education by student loans.
SAMPLE SIZE DETERMINATION FOR
THE PROPORTION
 To find the sample size needed to determine a
confidence interval about a proportion, use the
formula
rounded up to obtain a whole number

 If is unknown, use . This value will give a sample
size sufficiently large to guarantee an accurate
prediction, given the confidence interval and the error
of estimate. The reason is that when and are each 0.5,
the product is at maximum.
THE PROPORTION
Example:
A researcher wishes to estimate, with 95% confidence,
the proportion of people who own a home computer. A
previous study shows that 40% of those interviewed had
a computer at home. The researcher wishes to be
accurate within 2% of the true proportion. Find the
minimum sample size necessary.
Solution:
THE PROPORTION
Example:
A researcher wishes to estimate the percentage of
M&M’s that are brown. He wants to be 95% confident
and be accurate within 3% of the true proportion. How
large a sample size would be necessary?
Solution:
Since is unknown, we use 0.5

10 Estimation of Proportion

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PARAMETER ESTIMATION

 can be expressed as fractions, decimals, or percentage

 can be obtained from samples or populations

 For a sample proportion:

A survey is conducted to determine the opinions of people

1. Estimate the proportion of adults who think that global

2. What is the standard error of this estimate?

2. Standard error of this estimate

 Where the maximum error (or margin of error) is

Its standard error is

rounded up to obtain a whole number

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