Confidence Interval

Definition: It is a type of interval estimate (of a population parameter) that is computed from
the observed data. Confidence intervals consist of a range of values (interval) that act as good
estimates of the unknown population parameter
The basic breakdown of how to calculate a confidence interval for a population mean is as follows:

1. Identify the sample mean, x̄.

2. Identify whether the standard deviation is known, σ, or unknown, s.
a. If standard deviation is known then z* is used as the critical value. This value is only
dependent on the confidence level for the test.
b. If the standard deviation is unknown then Student's t distribution is used as the
critical value. This value is dependent on the confidence level (C) for the test and
degrees of freedom. The degrees of freedom is found by subtracting one from the
number of observations, n − 1. The critical value is found from the t-distribution table.
In this table the critical value is written as tα(r), where r is the degrees of freedom
and α as the level of significance
3. Plug the found values into the appropriate equations:
σ σ
a. For a known standard deviation: (x̄ - z 𝑛, x̄ + z 𝑛)
√ √
σ σ
b. For an unknown standard deviation (x̄ - t , x̄ + t )
√𝑛 √𝑛
4. The final step is to interpret the answer. Since the found answer is an interval with an upper
and lower bound it is appropriate to state that based on the given data we are __ %
(dependent on the confidence level) confident that the true mean of the population is
between __ (lower bound) and __ (upper bound).

Example
A sample of Alzheimer's patients are tested to assess the amount of time in stage IV sleep. It has
been hypothesized that individuals sufferering from Alzheimer's Disease may spend less time per
night in the deeper stages of sleep. Number of minutes spent is Stage IV sleep is recorded for sixty-
one patients. The sample produced a mean of 48 minutes (S=14 minutes) of stage IV sleep over a 24
hour period of time. Compute a 95 percent confidence interval for this data. What does this information
tell you about a particular individual's (an Alzheimer's patient) stage IV sleep?