Week8
Week8
Topic 5
Confidence Interval Estimation
Tutorial Week 8
1
Concept Review
Confidence Interval Estimation for the Population Mean
Using Distribution ( Known)
Using Distribution ( Unknown)
Next week (Week 9)
Determining Required Sample Size for Estimating Mean
2
What is a Confidence Interval?
Provides a range of values
Using one sample to indicate population
Recall that if we calculate every possible samples.
3
Confidence Interval Estimation
1. We need the to be a normal distribution
Confidence
Intervals for μ
σKnown
Known Unknown Large Sample Small Sample
(n ≥ 30) (n < 30)
distribution distribution
Known Unknown
yes Z
2. Do we know
t distribution distribution
no
4
CI for ( Known)
Conditions
Population standard deviation () is known
Population is normally distributed
If population is not normal, but with a large sample , by Central
Limit Theorem
Confidence interval estimate
Standard Error,
P(Z<
Sampling Error,
(Also called margin of error)
Critical Value
5
CI for ( Known)
Level of Confidence
Confidence that the interval will cover the unknown population
mean
-value (Critical Value)
is the value corresponding to an upper-tail probability of from
the standardized normal distribution
Sampling Error (Margin of Error)
𝛼 /2
0 𝑍 𝛼/2 𝑍
6
CI for ( Known) Recall:
(< < )
Derivation 2
𝜎
𝑋 𝑁 (𝜇 𝑋 , ( ))
√ 𝑛 α/2 α/2
1 −𝛼
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CI for ( Known)
Interpretation
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Factors Affecting Interval Width
(Precision) Recall:
Data variation Width = upper – lower
Measured by = Xbar + E – (Xbar – E)
width of interval =2*E
Level of confidence
Measured by
-valuewidth of interval
is a fixed parameter
affects the location of the interval, but not the width
9
Student’s -distribution
The variable no longer follows the standardized normal
distribution
Mathematically, follows a distribution called Student’s -
distribution
Also simply called -distribution
Often denoted as
The probability density function of -distribution is
,
where G is the gamma function and is the parameter of the
function which often called the degrees of freedom
10
Student’s -distribution
Properties of t distribution Recall:
For
Mean & Standard Deviation
Mean = 0 for >1, otherwise it is undefined
Standard deviation = for > 2, = for , otherwise undefined
The shape of the density function
The theoretical range of is infinite, i.e.
Bell shaped
Symmetric about = 0
Median = mode = 0
As increases, the density curve approaches the N(0, 1) curve
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Student’s -distribution
Cont’d
Standard Normal
(t with = ∞)
t (= 13)
-distributions have ‘fatter’
tails than the normal, i.e. t ( = 5)
more likely to get value
away from the mean
0 𝑇
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Student’s -distribution
Cont’d
Find degree of
freedom here The value within the table gives the t-value
corresponding to a particular degrees of freedom
and upper-tail area
At 7 degrees of freedom,
13
CI for ( Unknown)
Conditions
Population standard deviation () is unknown
Population is normally distributed
If population is not normal, but with a large sample , by Central
Limit Theorem
Confidence interval estimate
14
Factors Affecting Interval Width
(Precision)
Sample Size
width of interval
width of interval
Level of confidence
Measured by
-valuewidth of interval
is a random variable
affects the location of the interval, but not the width
15
Determining Sample Size
Statisticians have control over the sampling error () by
choosing appropriate sample sizes that are large enough
to make the results appear credible
Sampling error measures how far off the estimation results are
likely to be from the result that they would have gotten if the
entire population are surveyed instead of merely a sample
never use t value!
The required sample size can be
found to reach desired sampling
error with a specified level of
confidence 𝑋
𝜎 𝑋 + 𝑍 𝛼/ 2 𝜎
𝑋 − 𝑍𝛼 / 2 √𝑛
√𝑛
= Sampling Error
16
Determining Sample Size
Cont’d
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Summary
Week7
Week8
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