Confidence Interval

the level of assurance you have that the

resulting confidence interval encloses
● a specific interval estimate of a parameter the unknown population mean
determined by using data obtained from a
sample and by using the specific confidence
Confidence As the confidence interval for a given

Level
level of the estimate. statistic increases in length, the
confidence level increases.
● a range of possible values the parameter might
take, controlling the probability that the The selection of a confidence level for
parameter is not lower than the lowest value an interval determines the probability
that the confidence interval produced
in this range and not higher than the largest will contain the true parameter value.
value.

Confidence Interval: Z - Scores

Common
Confidence
Intervals

Confidence Interval

Margin of Error
(point estimate – margin of error, point estimate + margin of error)
the amount that is added to and
subtracted from the mean to construct
the confidence interval (𝑥ҧ – EBM, 𝑥ҧ + EBM)
 alpha (α)
A confidence interval for a population
mean with a known standard deviation is
based on the fact that the sample means
the probability that the interval
follow an approximately normal
does not contain the unknown distribution.
population parameter
𝜎 𝜎
α + CL = 1 𝑋ത − 𝑧𝛼 < 𝜇 < 𝑋ത + 𝑧𝛼
2 𝑛 2 𝑛

Steps in Calculating the Confidence Interval

Step 01 Step 03 Interpretation

Calculate the “We estimate with ___% confidence that
Identify the Step 02 confidence
Step 04 the true population _______ (include the
given from the context of the problem) is between ___
sample data. interval.
Find the z-score Interpret the and ___ (include appropriate units).”
that
estimate
corresponds to
the confidence
level.

95% Confidence Intervals for Each Sample Mean

Rounding Rule for a Confidence
Interval for a Mean
• When you are computing a confidence interval for a
population mean by using raw data, round off to one
more decimal place than the number of decimal places in
the original data.
• When you are computing a confidence interval for a
population mean by using a sample mean and a standard
deviation, round off to the same number of decimal
places as given for the mean.
 Sample Problem
A researcher wishes to estimate the number of days it takes
an automobile dealer to sell a Chevrolet Aveo. A random
sample of 50 cars had a mean time on the dealer’s lot of 54
days. Assume the population standard deviation to be 6.0
days. Find the best point estimate of the population mean
and the 95% confidence interval of the population mean.
Sample Problem
A large department store found that it averages 362
customers per hour. Assume that the standard deviation is
29.6 and a random sample of 40 hours was used to
determine the average. Find the 99% confidence interval of
the population mean.

● Source: Based on information obtained from Power Information Network.

Interpretation

“We estimate with ___% confidence

that the true population _______
(include the context of the problem)
is between ___ and ___ (include
appropriate units).”

Sample Problem William Sealy Gosset

The following data represent a random sample of the assets (in • pioneered small sample experimental
millions of dollars) of 30 credit unions in southwestern design and analysis with an economic
Pennsylvania. Assume the population standard deviation is 14.405. approach to the logic of uncertainty
Find the 90% confidence interval of the mean. • published under the pen name
Student and developed most
12.23 16.56 4.39 2.89 1.24 2.17
famously Student's t-distribution –
13.19 9.16 1.42 73.25 1.91 14.64
11.59 6.69 1.06 8.74 3.17 18.13
originally called Student's "z" – and
7.92 4.78 16.85 40.22 2.42 21.58 "Student's test of statistical
5.01 1.47 12.24 2.27 12.77 2.76 significance"
 It is bell – shaped.

It is symmetric about the mean.

t - score Properties of
the Student’s t The mean, median, and mode are
𝑥ҧ − 𝜇 - Distribution equal to 0 and are located at the
𝑡= 𝑠 center of the distribution.

𝑛 The curve approaches but never

touches the x axis.

t – Distribution vs. Normal Distribution

t – Distribution vs. Normal Distribution

The t distribution As the sample The Student’s t-distribution

The is a family of size increases, has more probability in its
variance curves based on the t tails than the standard
is greater the concept of distribution normal distribution
than 1. degrees of approaches the because the spread of the
freedom, which is standard normal t-distribution is greater
related to sample distribution. than the spread of the
size. standard normal.

Degrees of Freedom Confidence Interval

𝑠 𝑠
𝑋ത − 𝑡𝛼 < 𝜇 < 𝑋ത + 𝑡𝛼
2 𝑛 2 𝑛

where:
n = sample size
s = sample standard deviation
𝑋ത = normal distribution sample mean
tα/2 – the positive t-score for a specific confidence interval
 Sample Problem Sample Problem
The data represent a random sample of the number of home
A random sample of 10 children found that their average
fires started by candles for the past several years. (Data are
growth for the first year was 9.8 inches. Assume the variable
from the National Fire Protection Association.) Find the 99%
is normally distributed and the sample standard deviation is
confidence interval for the mean number of home fires started
0.96 inch. Find the 95% confidence interval of the population
by candles each year.
mean for growth during the first year.
5460 5900 6090 6310 7160 8440 9930

Interpretation

“We estimate with ___% confidence

that the true population _______
(include the context of the problem)
is between ___ and ___ (include
appropriate units).”

Sample Problem The underlying distribution is a binomial

distribution thus there is no mention of a
mean or average.

A sample of 14 randomly selected commuters in Chicago

Conditions for When n is large and p is not close to zero

showed the average of the commuting times was 33.2 minutes. Proportion or one, we can use the normal
distribution to approximate the binomial.
If the standard deviation was 8.3 minutes, find the 95% Estimation 𝜇 = 𝑛𝑝 𝑎𝑛𝑑 𝜎 = 𝑛𝑝𝑞

confidence interval of the true mean. Problems If the number of successes 𝑛𝑝Ƹ and the
number of failures 𝑛𝑞ො are both greater
than five.
𝑛𝑝Ƹ ≥ 5 𝑎𝑛𝑑 𝑛𝑞ො ≥ 5
 Confidence Interval
Sample Problem
𝑝Ƹ 𝑞ො 𝑝Ƹ 𝑞ො
𝑝Ƹ − 𝑧𝛼 < 𝑝 < 𝑝Ƹ + 𝑧𝛼
2 𝑛 2 𝑛
A survey conducted by Sallie Mae and Gallup of 1404
where: respondents found that 323 students paid for their education
n is the number of trials or the sample size
p is the population proportion
by student loans. Find the 90% confidence interval of the true
X is the random variable for the number of success proportion of students who paid for their education by
𝑝Ƹ 𝑟𝑒𝑎𝑑 𝑎𝑠 "p hat" is the estimated proportion of success
𝑋 student loans.
𝑝Ƹ = 𝑎𝑛𝑑 𝑞ො = 1 − 𝑝Ƹ
𝑛
zα/2 – the positive z-score for a specific confidence interval

Sample Problem Sample Problem

A survey of 1898 adults with lawns conducted by Harris
Interactive Poll found that 45% of the adults said that
dandelions were the toughest weeds to control in their yards.
Find the 95% confidence interval of the true proportion who
said that dandelions were the toughest weeds to control in
their yards.
Fifty-six percent of respondents to an online poll said that they
were Perry Como fans. If 982 randomly selected people
responded to this poll, what is the true proportion of all local
residents who are Perry Como fans? Estimate at the 95%
confidence level.

ZEE OR TEE?