ESTIMATION Sample Statistics are used to estimate Population Parameters.

Bias A statistic is biased if, in the long run, it consistently over or underestimates the parameter it is estimating. Standard error The standard error of a statistic is the standard deviation of the sampling distribution of that statistic.

POINT AND INTERVAL ESTIMATES When a parameter is being estimated, the estimate can be either a single number or it can be a range of scores. When the estimate is a single number, the estimate is called a "point estimate"; when the estimate is a range of scores, the estimate is called an interval estimate. Confidence intervals are used for interval estimates. As an example of a point estimate, assume you wanted to estimate the mean time it takes 12-year-olds to run 100 yards. The mean running time of a random sample of 12-year-olds would be an estimate of the mean running time for all 12-year-olds. Thus, the sample mean, x , would be a point estimate of the population mean, . Often point estimates are used as parts of other statistical calculations. For example, a point estimate of the standard deviation is used in the calculation of a confidence interval for . Point estimates of parameters are often used in the formulas for significance testing. Point estimates are not usually as informative as confidence intervals. Their importance lies in the fact that many statistical formulas are based on them.

CONFIDENCE INTERVAL A confidence interval is a range of values computed in such a way that it contains the estimated parameter a high proportion of the time. The 95% confidence interval is constructed so that 95% of such intervals will contain the parameter. Similarly, 99% of 99% confidence intervals contain the parameter. If the parameter being estimated were , the 95% confidence interval might look like the following: 12.5 30.2 Confidence intervals are written with a percentage; what does this percentage represent? If the researcher were to take 100 random samples with a 95% confidence interval for each sample, then he or she expects that for 95 of the 100 samples (95%), the range of values produced by the confidence interval procedure will include the true mean of the population. Although the researcher in practice only has a single sample, the researcher is confident that their interval contains the true mean due to the process used to calculate the confidence interval. Width of the Interval A narrow confidence interval implies high precision; we can specify plausible values to within a tiny range. A wide interval implies poor precision; we can only specify plausible values to a broad and uninformative range. Confidence level - The width of the confidence interval increases as the confidence level increases, since with a greater width one is more likely to have included the true mean. Sample Size - The width of your confidence interval goes down as the sample size goes up, since you are placing a larger value in the denominator. This is a classic and intuitive relationship in statistics: larger sample sizes provide greater precision (that is, narrower confidence intervals). FORMULA TO CALCULATE A CONFIDENCE INTERVAL.

Multiple Choice Questions 1. The value(s) assigned to a population parameter based on the value of a sample statistic is called: a. the probability b. a probability distribution c. a sampling distribution d. an estimate 2. The single value of a sample statistic that is assigned to the population parameter is called: a. a single estimate b. a unique estimate c. a point estimate d. a singular estimate 3. The normal distribution is used to make a confidence interval for the population mean when the sample size is: a. greater than 30 b. less than 25 c. greater than or equal to 30 d. greater than 100 4. The width of a confidence interval depends on the size of: a. the sample mean b. the population mean c. the median d. the maximum error of estimate 5. A statistical method that produces a 76% confidence interval is expected to contain a given population parameter within that interval A) 100% of the time with a 24% chance of error B) 76% of the time C) 24% of the time D) 0% of the time since it has nothing to do with population parameters. 6. . Which of the following actions will not reduce the size of a confidence interval? A) Having the sample variance instead of the population variance. B) Decreasing the sample size. C) Having a larger population variance. D) Decreasing the confidence level. 7. A 99% confidence interval estimate can be interpreted to mean that a) if all possible samples are taken and confidence interval estimates are developed, 99% of them would include the true population mean somewhere within their interval. b) we have 99% confidence that we have selected a sample whose interval does include the population mean. c) Both of the above. d) None of the above. Questions 1. Find the z values for the following confidence interval levels: (a) 90% (b) 95% (c) 98% (d) 99% 2. A random sample of 64 cars passing a check-point on a certain highway showed a mean speed of 60.0 mph. The standard deviation of all speeds is known to be 15.0 mph. Establish a 90% confidence interval for the mean speed of cars on this highway. Interpret the meaning of this interval. [5] 3. The salaries of university lecturers in a particular country is said to be normally distributed with a standard deviation of $1500.00. If a random sample of 20 university lecturers is taken giving a mean monthly salary of $18000.00, construct a 99% confidence interval for the true mean salary of all university lecturers in this country. Give an interpretation of your interval. [6] 4. A random sample of 36 mid-sized cars tested for fuel consumption gave a mean of 26.4 miles per gallon. The population standard deviation is known to be 2.3 miles per gallon. Find a 99% confidence interval for the population mean fuel consumption and interpret your result. [6] 5. (a) Distinguish between the following terms. Use relevant examples in your explanation(s). (i). (ii). (iii). (iv). (b) Population Parameter Sample Statistic Estimation. Interval Estimate.

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A random sample of 1500 homes sold recently in a state gave a mean price of homes in this state equal to $275,345. The standard deviation of the population of homes is $65,300. Construct a 90% confidence interval for the mean price of all homes in this state and interpret your result. [6]