DAS 20502

Definition
The assignment of value(s) to a population parameter based on

a value of the corresponding sample statistic is called estimation.

In inferential statistics, is called the true population mean Other population parameters include 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 manager may want to estimate the average time taken by

new employees to learn a job

the U.S. Census Bureau may want to find the mean housing

expenditure per month incurred by households

These examples are illustrations of estimating the true population mean,

Suppose the U.S. Census Bureau wanted to find the mean housing
expenditure incurred by households, they need to contact every household in the United States to find the value of
too expensive
very time consuming virtually impossible to contact every member of a population to

collect information to find the true value of a population parameter

To estimate the mean housing expenditure per month incurred by

all households in the United States, the Census Bureau will
take a sample of certain households collect the information on the housing expenditure that each of

these households incurs per month

compute the value of the sample mean, x based on this value of x , the bureau will then assign values to

the population mean,

Definition
The value(s) assigned to a population parameter based on the

value of a sample statistic is called an estimate. The sample statistic used to estimate a population parameter is called an estimator.

Suppose the manager takes a sample of 40 new employees

He found that the mean time, x, 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

The sample statistic used to estimate a population parameter is called an estimator

Thus, the sample mean, x , is an estimator of the population mean,

Definition
The value of a sample statistic that is used to estimate a

population parameter is called a point estimate

Example
Suppose the Census Bureau takes a sample of 10,000

households and determines that the mean housing expenditure per month, x is $1970. Then, using x as a point estimate of , the Bureau can state that the mean housing expenditure per

month, , for all households is about $1970.

Find the point estimate of for the following:

X ~ B(10, ) X ~ B(26, 0.6)

Y = { 1.1, 1.4, 1.7, 1.3, 1.9, 1.5, 1.2, 1.6, 1.8, 2.0}
Z ~ N( , 1.5) has a sample mean x = 45.3 Z ~ N( , ) has a sample mean x = 12.9 and a standard

deviation s = 0.25

Definition
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.

Suppose we subtract $340 from $1970 and add $340 to $1970. We obtain the interval ($1970 $340) to ($1970 + $340), or $1630 to $2310. We state that the interval $1630 to $2310 is likely to contain , and

that the mean housing expenditure per month for all households in
the United States is between $1630 and $2310.

Lower confidence limit of the interval = $1630

Upper confidence limit of the interval = $2310

The number we add to and subtract from the point estimate is called the margin of error

Definition
The confidence 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.
Confidence coefficient = (1 ) Confidence level = (1 )100%

Confidence interval for population mean

Confidence interval for sample mean

Point estimate
Margin of error, e Lower confidence limit Upper confidence limit Sample size, n

For a data set obtained from a sample, n = 20 and x = 24.5. It is

known that = 3.1. The population is normally distributed.
a)

What is the point estimate of ?

b) Make a 99% confidence interval for . c)

What is the margin of error of estimate for part b?

The standard deviation for a population is = 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 .

b) Construct a 95% confidence interval for .

c) Determine a 99% confidence interval for . d) Does the width of the confidence intervals constructed in parts

a through c increase as the confidence level increases? Explain your answer.

Definition
The t-distribution is a specific type of bell-shaped distribution

with a lower height and a wider spread than the standard normal distribution.
As the sample size becomes larger, the t-distribution

approaches the standard normal distribution.

The t-distribution has only one parameter, called the degrees of

freedom (v ).

Formula

v=n1

Example : Suppose a boat can carry a maximum number of 3 people with maximum total weight 140kg. Person number 1 Person number 2 : : 45kg 55kg

Notice that the total weight is already 100kg for two people. We have no choice but to select a third person with weight 40kg or lower. We are not free to choose the third person to ride the boat. Degree of freedom, v = 3 1 = 2

Questions can be asked in the form of

or
Based on the diagram below
P(T 1.746) = ? t., = ?

P(T 1.746) = 0.05 t., = 1.746

Example From the t-distribution table, find

a) P(T 2.977), v = 14

Exercise From the t-distribution table, find

a) P(T 4.501), v = 8

b) P(T < 4.297), v = 9

c)

b) P(T < 3.485), v = 23

c)

P(T -2.457), v = 30

P(T -1.701), v = 28

Example
Using the statistical table, find

Exercise
Using the statistical table, find

4 types of intervals Determined by and n

Condition

known Use standard normal distribution

Unknown Use t-distribution Find s Use standard normal distribution Substitute by s

n < 30

n 30

Use standard normal distribution

Case 1 : known n 30

Case 2 : known n < 30

Case 3 : unknown n 30 Case 4 : unknown n < 30

1)
2) 3)

Identify (known, unknown) and n ( 30, < 30)

Find , then find or State the point of estimate for

4)

Write down the (1 )100% confidence interval for

The president of the Statistics Society wishes to estimate the

average age of students presently enrolled in the Statistics class. Based on the past records, the standard deviation is = 2 years.
a)

The mean of a sample of 50 selected students is 23.2 years.

Construct the 95% confidence interval for the population mean.

b) If a sample of 20 selected students has a mean of 15.2 years,

find the 95% confidence interval for the population mean.

There are 10 randomly selected automobiles where the tread

depth of the right front tire measured. The sample mean is 0.32 inch, and the sample standard deviation is s = 0.08 inch.
a)

Find the 95% confidence interval of the mean depth. Assume

that the variable is approximately normally distributed.

b) If the sample size increased to 60 automobiles that selected

randomly, then with the same assumption from above, construct the 99% confidence interval of the mean depth.