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Interval Estimation
In many practical problems, the exact knowledge of the parameter may not be necessary. It is quite adequate if an interval along with a probability statement is specified such that the probability that the random interval will cover the unknown parameter is a specified number.
Statistical Methods Usha A. Kumar, IIT Bombay
Confidence intervals
Let The population distribution be normal. The value of the population standard deviation be known.
Statistical Methods
2
1
Z
0
X Z
Statistical Methods
Random interval
X Z
X +Z
X Z
Statistical Methods
Random Interval
The probability is 0.95 that the random interval includes or covers the true value of .
Statistical Methods
X1 1, X 2 = If after observing = x= x2 ,, X n xn , we compute the observed sample mean x and then substitute x in the random interval, the resulting fixed interval is called the 100(1 )% confidence interval for .
Statistical Methods
Statistical Methods
Example
Suppose it is known that the life of electric tubes manufactured by a company is normally distributed with a standard deviation of 50 hours. A random sample of 49 pieces observed for life estimation showed an average life of 1180 hrs. Compute a 95 percent confidence interval for the population mean of tubes manufactured by this company.
Statistical Methods Usha A. Kumar, IIT Bombay
Example
A new drug discovered to decrease blood pressure was tested on 100 patients which shows a mean decrease of 18 units and a sample standard deviation of 6 units. Find the 99% confidence interval for the mean decrease in blood pressure due to the new drug.
Statistical Methods Usha A. Kumar, IIT Bombay
has approximately a standard normal distribution. This implies that x z / 2 n is a large sample confidence interval for with confidence level approximately 100(1 )% . This formula is valid regardless of the shape of the population distribution.
Statistical Methods Usha A. Kumar, IIT Bombay
X Z= / n
Both X and vary in value from one sample to another. However, for large n the substitution of S for adds little extra variability and hence this variable also has approximately a standard normal distribution.
Statistical Methods Usha A. Kumar, IIT Bombay
Example
A market survey is conducted to ascertain the proportion of smokers smoking a particular brand A. Out of 100 smokers surveyed, 64 were found to be smoking that brand. Find a 95% confidence interval for the proportion of smokers smoking brand A.
Statistical Methods Usha A. Kumar, IIT Bombay
Statistical Methods
A confidence interval for a population proportion p with confidence level approximately 100(1 )% is
2 2 2 2 z / 2 z / 2 pq z / 2 pq z / 2 z / 2 + 2 p+ + z / 2 + p+ 2n n 4n , 2n n 4n 2 2 2 1 + ( z / 2 ) / n 1 + ( z / 2 ) / n
pq n
Usha A. Kumar, IIT Bombay
Example
The length of time required for persons taking the civil service test is assumed to be normally distributed. A random sample of 16 persons taking the test is conducted and their test times are recorded, yielding an average test time of 60 minutes with a standard deviation of 12 minutes. Find a 95 percent confidence interval for the population mean test time.
Statistical Methods Usha A. Kumar, IIT Bombay
The t distribution
The population has a normal distribution. The value of the population standard deviation is unknown.
Statistical Methods
Result
When X is the mean of a random sample of n from a normal distribution with mean , the rv
T= X S/ n
The t Distribution
Developed by British statistician, William Gosset A family of distributions -- a unique distribution for each value of its parameter, degrees of freedom (d.f.) Symmetric, Unimodal, Mean = 0, Flatter than Z
The density of T
The density of T is
2 ( v +1) / 2
[(v + 1) / 2] t = f (t ) 1 + v (v / 2) v
, < t <
Statistical Methods
-3
-2
-1
Statistical Methods
Let x and s be the sample mean and sample standard deviation computed from the results of a random sample from a normal population with mean . Then a 100(1 )% confidence interval for is s s
, x + t / 2,n 1 x t / 2,n 1 n n
Statistical Methods
Example
A random sample of 20 teletype operators indicates that their salaries fluctuate quite a bit. The sample standard deviation of their daily salaries is Rs. 90. Construct a 90 percent confidence interval on the population standard deviation of the daily salaries.
Statistical Methods
Result
Let X 1 , X 2 ,, X n be a random sample from a normal distribution and 2 . Then the with parameters rv
(n 1) S
2
( X i X )
Selected 2 Distributions
df = 3 df = 5 df = 10
0
Statistical Methods Usha A. Kumar, IIT Bombay
/ 2, n 1
2
< <
2
( n 1) S 2
12 / 2, n 1