7

Estimation of Parameters
Estimation: An Introduction
Estimation is a procedure by which a numerical value or values are assigned to a population
parameter based on the information collected from a sample.

Estimation. The assignment of values to a population parameter based on a value of the

corresponding sample statistic is called estimation

In inferential statistics, μ, is called the true population mean and p is called the true
population proportion. There are many other population parameters, such as the median, mode,
variance and standard deviation.

The following are a few examples of estimation: an auto company may want to estimate the
mean fuel consumption for a particular model of a car; a manger may want to estimate the average
time taken by new employees to learn a job; the Philippine Statistics Office (PSO) may want to find
the mean housing expenditure per month incurred by households; and the Philippine Animal
Welfare Society (PAWS) may want to find the proportion of all cats that are abandoned.

The examples about estimating the mean fuel consumption, estimating the average time to
learn a job by new employees, and estimating the mean housing expenditure per month incurred by
households are illustrations of estimating the true population mean, μ. The example about
estimating the proportion of all cats that are abandoned is an illustration of estimating the true
population proportion, p.

If we conduct a census (a survey that includes the entire population) each time we want to
find the value of a population parameter, then the estimation procedures explain in this and
subsequent lessons are not needed. For example, if the PSO can contact every household in the
Philippines to find the mean housing expenditure incurred by households, the result of the survey
(which will actually be a census) will give the value of μ, and the procedures learned for samples
will not be needed. However, it is too expensive, very time consuming, or virtually impossible to
contact every member of a population to collect information to find the true value of a population
parameter. Therefore, we usually take a sample from the population and calculate the value of the
appropriate sample statistic. Then we assign a value or values to the corresponding population
parameter based on the bale of the sample statistic.

The values assigned to a population parameter based on the value of a sample statistic is
called an estimate of the population parameter. For example, suppose the manager takes a sample
of 50 new employees and finds that the mean time, x̅ , taken to learn this job for these employees is
5.5 hours. If he or she assigns this value to the population mean, then 5.5 hours is called an estimate
of μ. The sample statistic used to estimate a population parameter is called an estimator. Thus, the
sample mean, x̅ , is an estimator of the population mean, μ; and the sample proportion, p̂ , is an
estimator of the population proportion, p.

The estimation procedure involves the following steps

1. Select a sample
2. Collect the required information from the members of the sample
3. Calculate the value of the sample statistic.
4. Assign value/s to the corresponding population parameter.

Point and Interval Estimates

An estimate may be a point estimate or an interval estimate.

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A Point Estimate

If we select a sample and compute the value of the sample statistic for this sample, then this
value gives the point estimate of the corresponding population parameter.

Point Estimate. The value of a sample statistic that is used to estimate a population
parameter is called a point estimate.

This, the value computed for the sample mean, x̅ , from a sample is a point estimate of the
corresponding population mean, μ. Each sample selected from a population is expected to yield a
different value of the sample statistic. Thus, the value assigned to a population mean, μ, based on a
point estimate depends on which of the samples is drawn. Consequently, the point estimate assigns
a value to μ that almost always differs from the true value of the population mean.

An Interval Estimate

In the case of interval estimation, instead of assigning a single value to a population

parameter, an interval is constructed around the point estimate, and then probabilistic statement
that this interval contains the population parameter is made.

Interval Estimation. In interval estimation, an interval is constructed around the point

estimate, and it is stated that this interval is likely to contain the corresponding population
parameter.

For the example about the mean housing expenditure, instead of saying that the mean
housing expenditure per month for all household is ₱1970, we may obtain an interval by subtracting
a number from ₱1970 and adding the same number to ₱1970. Then we state that this interval
contains the population mean, μ. For purposes of illustration, suppose we subtract ₱340 from ₱1970
and add ₱340 to ₱1970. Consequently, we obtain the interval ₱1630 to ₱2310. Then we state that the
interval ₱1630 to ₱2310 is likely to contain the population mean, μ, and that the mean housing
expenditure per month for all house households in the Philippines is between ₱1630 to ₱2310. This
procedure is called interval estimation. The value ₱1630 is called the lower limit of the interval, and
₱2310 is caked the upper limit of the interval. The number we add to and subtract from the point
estimate is called the margin of error.

μ x̅ = ₱1970
₱1630 ₱2310

The question arises: what number should we subtract from and add to a point estimate to
obtain an interval estimate? The answer to this question depends on two considerations:
1. The standard deviation σx̅ of the sample mean, x̅ .
2. The level of confidence to be attached to the interval.

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First, the larger the standard deviation of x̅ , the greater is the number subtracted from and
added to the point estimate. Thus, it is obvious that if the range over which x̅ can assume values is
larger, then the interval constructed around x̅ must be wider t include μ.

Second, the qunatity subtracted and added must be larger if we want to have a higher
confidence in our interval. We always attach a probabilistic statement to the interval estimation.
This probabilistic statement is given by the confidence level. An interval constructed baed on this
confidence level is called a confidence interval.

Confidence Level and Confidence Interval. Each interval is constructed with regard to a given
confidence level and is called a confidence interval. The confidecne interval is given as
Point estimate ± Margin of error
The confidence level associated with a confidence interval states how much confidence we
have that this interval contains the true population parameter. The confidence level is denoted by
(1 - α) ∙ 100%.

The confidence level is denoted by (1 – α) ∙ 100%, where α is the Greek letter alpha. When
expressed as probability, it is called the confidence coefficient and is denote by 1 – α. In passing,
note that α is called the significance level, which will be explained in hypothesis testing.

Although any value of the confidence level can be chosen to construct a confidence interval,
the more common values are 90%, 95%, and 99%. The corresponding confidence coefficients are
0.90, 0.95, and 0.99, respectively.

Estimation of a Population Mean: σ Known

In constructing a confidence interval for the population mean μ when the population
standard deviation σ is known, there are three possible cases:

Case 1. If the following three conditions are fulfilled.

1. The population standard deviation σ is known
2. The sample size is small (i.e. n < 30)
3. The population from which the sample is selected is normally distributed
then we can use the normal distribution to make the confidence interval for μ because the
sampling distribution of x̅ is normal with its mean equal to μ and the standard deviation equal to
σx̅ = σ/√n, assuming that n/N ≤ 0.05.

Case 2. If the following two conditions are fulfilled.

1. The population standard deviation σ is known
2. The sample size is large (i.e., n ≥ 30)
then, again, we use the normal distribution to make the confidence interval for μ due to the
central limit theorem, the sampling distribution of x̅ is normal with its mean equal to μ and the
standard deviation equal to σx̅ = σ/√n, assuming that n/N ≤ 0.05.

Case 3. If the following three conditions are fulfilled:

1. The population standard deviation σ is known
2. The sample size is small (i.e., n< 30)
3. The population from which the sample is selected is not normally distributed (or its
distribution is unknown).
then we use a nonparametric method to make the confidence interval for μ.

The procedure for making a confidence interval for μ is the same in both the first two cases.
Note that in Case 1, the population does not have to be exactly normally distributed. As long as it is
close to the normal distribution without any outliers, we can use the normal distribution procedure.
In Case 2, although 30 is considered a large sample, if the population distribution is very different
from the normal distribution, then 30 many not be large enough sample size for the sampling
distribution of x̅ to be normal and, hence, to use the normal distribution.

Confidence Interval for μ. The (1 – α) ∙ 100% confidence interval for μ under Cases 1 and 2 is

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𝑥̅ ± 𝑧𝜎𝑥̅
𝜎
𝜎𝑥̅ =
√𝑛
where
The value of z used here is obtained from the standard normal distribution for the given
confidence level.

The quantity zσx̅ in the confidence interval formula is called the margin of error and is
denoted by E.

Margin of Error. The margin of error for the estimate for μ, denoted by E, is the quantity that
is subtracted from and added to the value of x̅ to obtain a confidence interval for μ. Thus,

𝐸 = 𝑧𝜎𝑥 ̅

The value of z in the confidence interval formula is obtained from the standard normal
distribution table for the given confidence level. To illustrate, suppose we want to construct a 95%
confidence interval for μ. A 95% confidence level means that the total area under the normal curve
for x̅ between two points (at the same distance) on different sides of μ is 95%, or 0.95.

0.9500

0.025 0.025

Thus, for a confidence level of 95%, we will use z = 1.96 in the confidence interval formula.

The table lists the z values for some of the most commonly used confidence levels. Note that
we always use the positive value of z in the formula.

Confidence Level z Value

90% 1.645
95% 1.96
96% 2.05
97% 2.17
98% 2.33
99% 2.575

Example

A publishing company has just published a new senior high school textbook. Before the
company decides the prices at which to sell this textbook, it wants to know the average price of all
such textbooks in the market. The research department at the company took a sample of 25
comparable textbooks and collected information on their prices. This information produced a mean
price of ₱145 for this sample. It is known that the standard deviation of the prices of all such
textbooks is ₱35 and the population of such prices is normal

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a. What is the point estimate of the mean price of all such college textbooks?
b. Construct a 90% confidence interval for the mean price of all such senior high school
textbooks.

Solution.

Here, σ is known and, although n < 30, the population is normally distributed. Hence, we
can use the normal distribution. From the given information
𝑛 = 25
𝑥̅ = ₱145
𝜎 = ₱35

The standard deviation of x̅ is

𝜎 35
𝜎𝑥̅ = = = ₱7
√𝑛 √25

a. The point estimate of the mean price of all such senior high school textbooks is ₱145; that is.
𝑥̅ = ₱145

b. The confidence level is 90%, or 0.90. First we find the z value for a 90% confidence level,
which according to the previous table is z = 1.645. Next, we substitute all the values in the
confidence interval formula for μ. The 90% confidence interval for μ is

𝑥̅ ± 𝑧𝜎𝑥̅ = 145 ± 1.645(7.0) = 145 ± 11.515

= (145 − 11.515)𝑡𝑜(145 + 11.515)
₱133.485 𝑡𝑜 ₱156.515
₱133.49 𝑡𝑜 ₱156.52

Thus, we are 90% confident that the mean price of all such senior high school
textbook is between ₱133.49 and ₱156.52. Note that we cannot say for sure whether the
interval contains the true population mean or not. Because μ is a constant, we cannot say
that the probability is 0.90 that this interval contains μ because this interval contains μ. All
we can say is that we are 90% confident that the mean price of all such senior high school
textbooks is between ₱133.49 and ₱156.52.

In the above estimate, ₱11.515 is called the margin of error or give-and-take figure.

How do we interpret a 90% confidence level? In terms of the previous example, if we take
all possible sample of 25 such senior high school text books and construct a 90% confidence
interval for μ around each sample mean, we can expect that 90% of these intervals will include μ
and 10% will not.

Example

In a 2009 survey by Dante LLC, adults with annual household incomes of ₱50 000 to
₱125 000 were asked about the average time they spend reviewing their income tax returns (ITR).
Of the adults surveyed, about 72% said that they spend less than 5 minutes, and 27% said that they
spend 5 to 10 minutes to review their ITRs. Suppose a random sample of 400 adults of all income
levels who have ITRs were recently asked about the times they spend reviewing their ITR. The
sample produced a mean of 8 minutes. Assume that the standard deviation of such times for all ITR
is 2.20 minutes. Construct a 99% confidence interval for the mean time spent by all adults
reviewing their ITR.

Solution

From the given information

𝑛 = 400

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𝑥̅ = 8 𝑚𝑖𝑛𝑢𝑡𝑒𝑠
𝜎 = 2.20 𝑚𝑖𝑛𝑢𝑡𝑒𝑠
𝑐𝑜𝑛𝑓𝑖𝑑𝑒𝑛𝑐𝑒 𝑙𝑒𝑣𝑒𝑙 = 99%

In this example, we know the population standard deviation σ. Although the shape of the
population distribution is unknown, the population standard deviation is known, and the sample
size is large (n > 30). Hence, we can use the normal distribution to make a confidence interval for μ.
To make this confidence interval, first we find the standard deviation of x̅ . The value of σx̅ is

𝜎 2.20
𝜎𝑥̅ = = = 0.11
√𝑛 √400

The z for a 99% confidence level is 2.575. Thus, we will use z = 2.575 in the confidence
interval formula. Substituting all the values in the formula, we obtain the 99% confidence interval
for μ.
𝑥̅ ± 𝑧𝜎𝑥̅ = 8 ± 2.575(0.11) = 8 ± 0.28325
7.71675 𝑡𝑜 8.28325
7.717 𝑡𝑜 8.283

Thus, we can state with 99% confidence that the mean time spent by all adults reviewing
their ITR is between 7.717 to 8.283 minutes.

The width of a confidence interval depends on the size of the margin of error, zσx̅ , which
depends on the values of z, σ, and n because σx̅ = σ /√n. However, the value of σ is not under the
control of the investigator. Hence, the width of a confidence interval can be controlled using

1. The value of z, which depends on the confidence level

2. The sample size n

The confidence level determines the value of z, which in turn determines the size of the
margin of error. The value of z increases as the confidence level increases, and it decreases as the
confidence level decreases. For example, the value of z is approximately 1.645 for a 90% confidence
level, 1.96 for a 95% confidence level, and approximately 2.575 for a 99% confidence level. Hence,
the higher the confidence level, the larger the width of the confidence interval, other things
remaining the same.

For the same value of σ, an increase in the sample size decreases the value of σx̅ , which in
turn decreases the size of the margin of error when the confidence level remains unchanged.
Therefore, an increase in the sample size decreases the width of the confidence interval.
Thus, if we want to decrease the width of a confidence interval, we have two choices:

1. Lower the confidence level

2. Increase the sample size.

Lowering the confidence level is not a good choice, however, because a lower confidence
level may give less reliable results. Therefore, we should always prefer to increase the sample size if
we want to decrease the width of a confidence interval.

Determining the sample Size for the Estimation of Mean

One reason we usually conduct a sample survey and not a census is that almost always we
have limited resources at our disposal. In light of this, if a smaller sample can serve our purpose,
then we will be wasting our resources by taking a larger sample. For instance, suppose we want to
estimate the mean life of a certain auto battery. If a sample of 40 batteries can give us the
confidence interval we are looking for, then we will be wasting money and times if take a sample of
a much larger size – say, 500 batteries. In such cases, if we know the confidence level and the width
of the confidence interval that we want, then we can find the size of the sample that will produce
the required result.

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From earlier discussion, we learned that E = zσ x̅ , is called the margin of error of estimate for
μ. As we know, the standard deviation of the sample mean is equal to σ/√n. therefore, we can write
the margin of error of estimate for μ as
𝜎
𝐸 =𝑧∙
√𝑛

Suppose we predetermine the size of the margin of error, E, and want to find the size of the
sample that will yield this margin of error. From the above expression, the following formula is
obtained that determines the required sample size n.

Determining the Sample Size for the Estimation of μ. Given the confidence level and the
standard deviation of the population, the sample size that will produce a predetermined margin of
error E of the confidence interval estimate of μ is

𝑧𝜎 2
𝑛=( )
𝐸

If we do not know σ, we can take a preliminary sample and find the sample standard
deviation, s. then we can use s for σ in the formula. However, note that using s for σ may give a
sample size that eventually may produce an error much larger than the predetermined margin of
error. This will depend on how close s and σ are.

Example

An alumni association wants to estimate the mean debt of this year’s senior high school
graduates. It is known that the population standard deviation of the debts of this year’s senior high
school graduates is ₱11 800. How large a sample should be selected so that the estimate with a 99%
confidence level is within ₱800 of the population mean?

Solution

The alumni association wants the 99% confidence interval for the mean debt of this year’s
college graduates to be

𝑥̅ ± 800

Hence, the maximum size of the margin of error of estimate is to be ₱800; that is,

𝐸 = ₱800

The value of z for a 99% confidence level is 2.575. The value of sigma if given to be ₱11 800.
Therefore, substituting all values in the formula and simplifying, we obtain
2
𝑧𝜎 2 (2.575)(11 800)
𝑛=( ) =( ) = 1442.575352 ≈ 1443
𝐸 (800)

Thus, the required sample size is 1443. If the alumni association takes a sample of 1443 of this
year’s college graduates, compute the mean debt for this sample, and then makes a 99% confidence
interval around this sample mean, the margin of error of estimate will be approximately ₱800. Note
that we have rounded the final answer for the sample size to the next higher integer. This is always
the case when determining the sample size.

Exercises

Concepts and Procedures

1. Briefly explain the meaning of an estimator and an estimate

2. Explain the meaning of a point estimate and an interval estimate

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3. What is the point estimator of the population mean, μ? How would you calculate the margin
of error for an estimate of μ?
4. Explain the various alternatives for decreasing the width of a confidence interval. Which is
the best alternative?
5. Briefly explain how the width of a confidence interval decreases with an increase in the
sample size. Give an example.
6. Briefly explain how the width of a confidence interval decreases with a decrease in the
confidence level. Give an example.
7. Briefly explain the difference between a confidence level and a confidence interval.
8. What is the margin of error of estimate for μ when σ is known? How is it calculated?
9. How will you interpret a 99% confidence interval for μ? Explain.
10. Find z for each of the following confidence levels.
a. 90% d. 97%
b. 95% e. 98%
c. 96% f. 99%
11. For a data set obtained from a sample, n = 20 and x̅ = 20.4. Tt is known that σ = 2.3. the
population is normally distributed.
a. What is the point estimate of μ?
b. Make a 99% confidence interval for μ
c. What is the margin of error of estimate for part b.
12. For a data set obtained from a sample, n = 81 and x̅ = 52.4. It is known that σ = 4.3.
a. What is the point estimate of μ?
b. Make a 95% confidence interval for μ
c. What is the margin of error of estimate for part b?
13. The standard deviation for a population is σ = 15.3. A sample of 36 observations selected
from this population gave a mean equal to 74.8.
a. Make a 90% confidence interval for μ.
b. Construct a 95% confidence interval for μ.
c. Determine a 99% confidence interval for μ.
d. Does the width of the confidence intervals constructed in parts a through c increase
as the confidence level increases? Explain your answer.
14. The standard deviation for a population is σ 14.8. A sample of 25 observations selected from
this population gave a mean to 143.72. The population is known σ to have a normal
distribution.
a. Make a 99% confidence interval for μ.
b. Construct a 95% confidence interval for μ.
c. Determine a 90% confidence interval for μ.
d. Does the width of the confidence intervals constructed in parts a through c decrease
as the confidence level decreases? Explain your answer
15. The standard deviation for a population is σ = 6.30. A random sample selected form this
population gave a mean equal to 81.60. The population is known to be normally distributed.
a. Make a 99% confidence interval for μ assuming n = 16.
b. Construct a 99% confidence interval for μ assuming n = 20.
c. Determine a 99% confidence interval for μ assuming n = 25.
d. Does the width of the confidence intervals constructed in parts a through c decrease
as the sample size increases? Explain your answer
16. The standard deviation for a population is σ = 7.14. A random sample selected from this
population gave a mean equal to 48.52.
a. Make a 95% confidence interval for μ assuming n = 196.
b. Construct a 95% confidence interval for μ assuming n = 100
c. Determine a 95% confidence interval for μ assuming n = 49.
d. Does the width of the confidence intervals constructed in parts a through c decrease
as the sample size decreases? Explain your answer
17. For a population, the value of the standard deviation is 2.35. A sample of 35 observations
taken from this population produced the following data.
42 51 42 31 28 36 45
24 46 37 32 29 33 41
47 41 28 46 34 39 48
26 30 37 38 46 48 39
29 31 44 41 37 38 46

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a. What is the point estimate of μ?

b. Make a 98% confidence interval for μ.
c. What is the margin of error of estimate for part b?
18. For a population, the value of the standard deviation is 3.84. A sample of 32 observations
taken from this population produced the following data.
74 85 72 70 86 81 77 60
81 78 79 88 76 80 84 78
81 72 76 81 79 83 88 86
78 83 87 82 83 84 68 74
a. What is the point estimate of μ?
b. Make a 99% confidence interval for μ.
c. What is the margin of error of estimate for part b?
19. For a population data set, σ = 10.5.
a. How large a sample should be selected so that the margin of error of estimate for a
99% confidence interval for μ is 1.70?
b. How large a sample should be selected so that the margin of error of estimate for a
96% confidence interval for μ is 3.00?
20. For a population data set, σ = 18.50
a. What should the sample size be for a 98% confidence interval for μ to have a margin
of error of estimate equal to 5.50?
b. What should the sample size be for a 95% confidence interval for μ to have a margin
of error of estimate equal to 4.00?

Estimation of a Population Mean: σ Not Known.

There are three possible cases.
Case 1. If the following three conditions are fulfilled.
1. The population standard deviation σ is not known
2. The sample size is small (i.e. n < 30)
3. The population from which the sample is selected is normally distributed
then we use the t distribution to make the confidence interval for μ.

Case 2. If the following two conditions are fulfilled.

1. The population standard deviation σ is not known
2. The sample size is large (i.e., n ≥ 30)
then again we use the t distribution to make the confidence interval for μ.

Case 3. If the following three conditions are fulfilled:

1. The population standard deviation σ is not known
2. The sample size is small (i.e., n< 30)
3. The population from which the sample is selected is not normally distributed (or its
distribution is unknown).
then we use a nonparametric method to make the confidence interval for μ.

The t Distribution

The t distribution was developed by W.S. Gosset in 1908 and published under the
pseudonym Student. As a result, the t distribution is also called Student’s t distribution. The t
distribution is similar to the normal distribution in some respects. Like the normal distribution
curve, the t distribution curve is symmetric (bell shaped) about the mean and never meets the
horizontal axis. The total area under a t distribution curve is 1 or 10%. However, the t distribution
curve is flatter than the standard normal distribution curve. In other words, the t distribution curve
has a lower height and a wider spread than the standard normal distribution. However, as the
sample size increases, the t-distribution approaches the standard normal distribution. The units of
a t distribution is denoted by t.

The shape of a particular t distribution curve depends on the number of degrees of freedom
(df).
𝑑𝑓 = 𝑛 − 1

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The number of degrees of freedom is the only parameter of the t distribution. There is a
different t distribution for each number of degrees of freedom. Like the standard normal
distribution, the mean of the t distribution is 0. But unlike the standard normal distribution, whose
standard deviation is 1, the standard deviation of a t distribution is √𝑑𝑓 (𝑑𝑓 − 2) , which is always
greater than 1. Thus, the standard deviation of a t distribution is larger than the standard deviation
of the standard normal distribution.

The t Distribution. The t distribution is a specific type of bell shaped distribution with a
lower height and a wider spread than the standard normal distribution. The t distribution has only
one parameter, called the degrees of freedom (df). The mean of the t distribution is equal to 0, and
its standard deviation is √𝑑𝑓 (𝑑𝑓 − 2) .

Confidence Interval for μ using the t Distribution.

To reiterate, when the conditions mentioned under Cases I and II holds true, we use the t
distribution to construct a confidence interval for the population mean, μ.
When the population standard deviation σ is not known, then we replace it by the sample
standard deviation s, which is its estimator. Consequently, for the standard deviation of x̅ , we use

𝑠
𝑠𝑥̅ =
√𝑛

for σx̅ = σ/√n. Note that the value of sx̅ is a point estimate of σx̅ .

Confidence Interval for μ using the t Distribution. The (1 – α)100% confidence interval for μ is

𝑥̅ ± 𝑡𝑠𝑥̅

where

𝑠
𝑠̅ =
√𝑛

The value of t is obtained from the t distribution table for n – 1 degrees of freedom and the given
confidence level. Here tsx̅ is the margin of error of the estimate; that is,

𝐸 = 𝑡𝑠𝑥̅

Example

Dr. Moore wanted to estimate the mean cholesterol level for all adult men living in Baguio.
He took a sample of 25 adult men from Baguio and found that the mean cholesterol level for this
sample is 186 mg/dL with a standard deviation of 12 mg/dL. Assume that the cholesterol levels for
all adult men in Baguio are normally distributed. Construct a 95% confidence interval for the
population mean μ.

Solution

Here, σ is not known, n < 30, and the population is normally distributed. Therefore we will
use the t distribution to make a confidence interval for μ. From the given information,
𝑛 = 25
𝑥̅ = 186
𝑠 = 12
Confidence level = 95% or 0.95

The value of sx̅ is

𝑠 12
𝑠𝑥̅ = = = 2.4
√𝑛 √25

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To find the value of t, we need to know the degrees of freedom and the area under the t-
distribution curve in each tail.

𝐷𝑒𝑔𝑟𝑒𝑒𝑠 𝑜𝑓 𝑓𝑟𝑒𝑒𝑑𝑜𝑚 = 𝑛 − 1 = 25 − 1 = 24

The value for t for df = 24 and 0.025 is 2.064.

When we substitute all values in the formula for the confidence interval for μ, the 95%
confidence interval is
𝑥̅ ± 𝑡𝑠𝑥̅ = 186 ± 2.064(2.4)
186 ± 4.9536
181.0464 𝑡𝑜 190.9536
181.046 𝑡𝑜 190.954
Thus, we can state with 95% confidence that the mean cholesterol level for all adult men
living in Baguio is between 181.046 and 190.954 mg/dL.
Note that x̅ = 186 is a point estimate of μ in this example, and 4.95 is the margin of error.

Exercises
Concepts and Procedures
1. Briefly explain the similarities and the differences between the standard normal
distribution and the t distribution.
2. What are the parameters of a normal distribution and a t distribution? Explain.
3. Briefly explain the meaning of the degrees of freedom for a t distribution. Give one example.
4. What assumptions must hold true to use the t distribution to make a confidence interval for
μ?
5. Find the value of t for the t distribution for each of the following.
a. Area in the right tail = 0.05 and df = 9
b. Area in the left tail = 0.001 and df = 34
c. Area in the left tail = 0.025 and n = 58
d. Area in the right tail = 0.005 and n = 27
6. Find the value of t from the t distribution table for each of the following
a. Confidence level = 99% and df = 21
b. Confidence level = 95% and n = 42
c. Confidence level = 90% and df = 12

Application
7. A random sample of 16 airline passengers at the Ninoy Aquino International Airport
showed that the mean time spent waiting in line to check in at the ticket counters was 78
minutes with a standard deviation of 14 minutes. Construct a 99% confidence interval for
the mean time was spent waiting in line by all passengers at this airport. Assume that such
waiting times for all passengers are normally distributed.
8. A random sample of 20 acres gave a mean yield of palay equal to 41.2 bushels per acre with
a standard deviation of 3 bushels. Assuming that the yield of palay per acre is normally
distributed, construct a 90% confidence interval for the population mean μ.
9. A random sample of 36 mid-sized cars test for fuel consumption gave a mean of 24.3 miles
per gallon with a standard deviation of 3.1 miles per gallon.
a. Find a 99% confidence interval for the population mean μ.
b. Suppose the confidence interval obtained in part a is too wide. How can the width of
this interval be reduced? Describe all possible alternatives. Which alternative is the
best and why?
10. The mean time taken to design a house plan by 40 architects was found to be 23 hours with
a standard deviation of 3.75 hours.
a. Construct a 98% confidence interval for the population mean μ.
b. Suppose the confidence interval obtained in part a is too wide. How can the width of
this interval be reduced? Describe all possible alternatives. Which alternative is the
best and why?

/jlpj2018