Statistical inference: probability distributions and confidence intervals

We are now familiar with descriptive statistics; but the main use of statistical methods is not description, but prediction
o i.e. we collect samples mostly to predict

characteristics of the whole population

The key instrument of extrapolation from sample to population is the analysis of probability distributions:
o By assuming that our variables have a certain

distribution (normal, uniform, etc.), we can use samples to infer population properties

In the following, well examine the concept and uses of statistical distributions
2

Most utilised statistical distribution is the normal distribution (the Bell curve)
o also the most infamous due to certain misuses
o http://crab.rutgers.edu/~goertzel/normalcurve.htm

However, there is nothing intrinsically wrong with using probability distributions

o well, anything in the wrong hands (from a bread

knife to a fundamental law of nature proposed by a pacifist) may become a weapon

The first reason for popularity of the normal curve is descriptive; i.e. we use it to model distribution of certain traits that look bell-shaped

What traits are bell-shaped? Typically, traits that are optimised or established by biological or social processes, and thus have a tendency to occur at an expected/established/optimal value
o classic example: biological traits under natural selection o but the only reason Darwin applied the principle of optimisation

to nature is that this was a current concept in Victorian society; human societies also define optimal values of certain features, with deviations (in both directions) being less common

Normal curve can describe features of optimised traits

o o o

mean value should be the most likely or frequently observed the furthest from the mean, the less likely a value should be sum of all cases (or probabilities) should be 100% (thats the whole sample)

What kind of curve/distribution produces this pattern? Lets try an exponential:

o o o

> x <- seq(-3, 3, 0.05) > y <- exp(x) > plot(x,y) # what does it look like?

Try others:
o o o

> y <- exp(-x) > y <- exp(x^2) > y <- exp(-x^2) #that works!
5

The normal distribution is just a modified version of our exponential The curve N(0,1) =

is the standard normal distribution with mean=0 sd=1 sum of frequencies=1

-3 -2 -1

0 +1 +2 +3

Distribution N(0, 1) is possibly the most used in statistical analyses

Is says that for example: the probability of being well above average (+3 standard deviations above mean) is only 0.1% probability of being one standard deviation below average (-1 sd) is 0.1+2.1+13.6=15.8% (i.e. everything below -1)

However, real traits (body height, income, schooling years, number of social media accounts) may have a normal distribution (bell shape), but rarely with mean=0 and standard deviation=1

That is not a problem: we can standardise variables, i.e. transform them so that everything you measure has mean=0 and sd=1
How is this done? With z-scores
7

1) We take variable x and subtract the mean from each case

o

If mean height is 180 cm, someone 170 cm tall now measures 170-180=-10

2) We take all residuals (case minus mean) and divide by standard deviation of sample
o

If sd=10 and mean is 180cm, then someone measuring 190 cm deviates -10 cm/10 cm= -1 standard deviation below the mean

In summary, standardisation or calculation of zscores is simply converting any measurements into standard deviation units using

i.e., if your height, or age, or income, etc. are average, then on the z-scale all those things measure zero
8

So: if in a population
o mean height = 180 cm o standard deviation=10

and you are 170cm, then

o you measure 10 cm above the average o you measure z = (170 180)/10 = -1

This means that the probability of being shorter than 170 cm in this population is
o 0.1 + 2.1 + 13.6 = 15.8%

The reason for standardising is clear: it is the theoretical step that allows the application of the normal distribution to many quantifiable aspects of reality
9

We are interested in intervals of the normal curve, not points Why? What does it mean to ask what is the probability of being a millionaire in the UK? (or their frequency) o it does not mean the probability of having exactly 1 million (thats a point) o it means everyone having over 1 million (and thats an interval) Cumulative probability is the probability of an interval of values
10

a lower interval

an upper interval

It is easy to estimate cumulative probability of being smaller than a value o You provide the individual value, the mean, and the sd, and R calculates z-score and the probability of the interval defined by that value Command pnorm(test value, mean, sd) calculates cumulative probability from left to right, i.e. from to a value x; o (thats the blue area) Example: if your height is 170 cm (and average is 180 cm, sd=10 cm), then o > pnorm(170,180,10) o [1] 0.1586553
a lower interval

11

pnorm can estimate upper intervals too (i.e. the probability of being over a given value:

Example: o what is the probability of being at least (i.e. taller than) 190cm in the same population?
Probability of being smaller than 190 cm is > pnorm(190,180,10) [1] 0.8413447 i.e. 0.841=84.1% Therefore the probability of being over 190 is the rest. i.e. > 1-pnorm(190,180,10) [1] 0.1586553 i.e.: probability of being taller than 190 cm is 1 (100%) minus the probability of being smaller than 190 cm

an upper interval

12

Important: we can combine the two things to calculate probability of extreme values (i.e. too large or too small) So what is the probability of being shorter than 170cm OR taller than 190 cm, with N(180, 10)?

> 1pnorm(190, 180, 10)+pnorm(170, 180, 10)

(check why)
13

Now the most important case (well see why):

What about probability of not being extreme, i.e. of being between 170 cm and 190 cm? (This means less than 10 cm off average of 180 cm)
o > pnorm(190, 180, 10) pnorm(170, 180, 10)

14

Take the estimates of years at school by country (from the HDR2011 database); this is the variable schoolingyears:

How can we estimate the proportion of countries with children having a) less than 3 years of schooling? b) less than 5 years of schooling? c) at least 7 years of schooling? Hints: -You need to use function pnorm -To use pnorm you need the test value, the mean and the standard deviation of variable schooling years
15