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14-Confidence Interval Introduction
14-Confidence Interval Introduction
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Today I will show you how to calculate a confidence
interval.
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A population parameter is a number calculated using
data from an entire population. While this number
always exists in an abstract sense, we rarely are able to
get the data to calculate it.
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The general confidence interval formula:
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Starting with a basic sampling distribution for a sample
proportion
Table 1. Sampling distribution for sample proportions
“Neighborhood” Cumulative
𝑝Ƹ values z-scores Frequencies probability probability
-4.00 0.0001 0.0000
-3.00 0.0044 0.0013
-2.00 0.0540 0.0028
-1.00 0.2420 0.1587
𝑝Ƹ = 𝜋 0.00 0.3989 0.5000
1.00 0.2420 0.8413
2.00 0.0540 0.9772
3.00 0.0044 0.9987
4.00 0.0001 1.0000
Totals 1.0000
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Adding rows for z-scores of -1.96 and +1.96
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𝑃 −1.96 ≤ 𝑧 ≤ 1.96 = 0.95
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Repeating the same steps for z-scores of ± 1.6449
𝑃 −1.6449 ≤ 𝑧 ≤ 1.6449 = 0.90
Table 1. Sampling distribution for sample proportions
“Neighborhood” Cumulative
𝑝Ƹ values z-scores Frequencies probability probability
-4.00 0.0001 0.0000
-3.00 0.0044 0.0013
-2.00 0.0540 0.0028
-1.6449 0.0500
-1.00 0.2420 0.1587
𝑝Ƹ = 𝜋 0.00 0.3989 0.5000
1.00 0.2420 0.8413
1.6449 0.9500
2.00 0.0540 0.9772
3.00 0.0044 0.9987
4.00 0.0001 1.0000
Totals 1.0000
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Repeating the same steps for z-scores of ± 2.5758
𝑃 −2.5758 ≤ 𝑧 ≤ 2.5758 = 0.99
Table 1. Sampling distribution for sample proportions
“Neighborhood” Cumulative
𝑝Ƹ values z-scores Frequencies probability probability
-4.00 0.0001 0.0000
-3.00 0.0044 0.0013
-2.5758 0.0050
-2.00 0.0540 0.0028
-1.00 0.2420 0.1587
𝑝Ƹ = 𝜋 0.00 0.3989 0.5000
1.00 0.2420 0.8413
2.00 0.0540 0.9772
2.5758 0.9950
3.00 0.0044 0.9987
4.00 0.0001 1.0000
Totals 1.0000
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Where did the ±1.6449, ±1.9600, and ±2.5758 come from?
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Returning to the sampling distribution for sample
proportions, where 𝑃 −1.96 ≤ 𝑧 ≤ 1.96 = 0.95
Table 1. Sampling distribution for sample proportions
“Neighborhood” Cumulative
𝑝Ƹ values z-scores Frequencies probability probability
-4.00 0.0001 0.0000
-3.00 0.0044 0.0013
-2.00 0.0540 0.0028
-1.9600 0.0250
-1.00 0.2420 0.1587
𝑝Ƹ = 𝜋 0.00 0.3989 0.5000
1.00 0.2420 0.8413
1.9600 0.9750
2.00 0.0540 0.9772
3.00 0.0044 0.9987
4.00 0.0001 1.0000
Totals 1.0000
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Some algebraic rearrangement
ො
𝑝−𝜋
Since 𝑧𝑝ො =
𝜎𝑝
ෝ
𝑝ො = 𝜋 + 𝑧𝑝ො × 𝜎𝑝ො
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𝑃 𝜋 − 1.96 × 𝜎𝑝ො ≤ 𝑝Ƹ ≤ 𝜋 + 1.96 × 𝜎𝑝ො = 0.95
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Margin of Error
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“Transplanting” the margin or error
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Thus, we get the general confidence interval formula:
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We can calculate confidence intervals for any sample
statistic if the sampling distribution is built using either
a z-score or a t-score
• Calculate one sample statistic (𝑝,Ƹ 𝑥,ҧ etc.) using data from just
one sample
• Use the given confidence level and either NORM.S.INV() or
T.INV() to determine the critical value needed to calculate the
margin of error
• Use a formula to calculate the standard error
• Use the confidence interval formula to perform final
calculations
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