1. Confidence Intervals for Proportions
Chapter 19
Confidence Intervals for Proportions
Copyright © 2009 Pearson Education, Inc.

2. Standard Deviation of Sampling Distribution
Both of the sampling distributions we’ve looked at are Normal.
For proportions
For means

3. Standard Error When we don’t know p or σ, we’re stuck, right?
Nope. We will use sample statistics to estimate these population parameters.
Whenever we estimate the standard deviation of a sampling distribution, we call it a standard error.

4. Standard Error For a sample proportion, the standard error is
For the sample mean, the standard error is

5. A Confidence Interval
Recall that the sampling distribution model of is centered at p, with standard deviation
Since we don’t know p, we can’t find the true standard deviation of the sampling distribution model, so we need to find the standard error:

6. A Confidence Interval (cont.)
By the % Rule, we know
about 68% of all samples will have ’s within 1 SE of p
about 95% of all samples will have ’s within 2 SEs of p
about 99.7% of all samples will have ’s within 3 SEs of p
We can look at this from ’s point of view…

7. A Confidence Interval (cont.)
Consider the 95% level:
There’s a 95% chance that p is no more than 2 SEs away from .
So, if we reach out 2 SEs, we are 95% sure that p will be in that interval. In other words, if we reach out 2 SEs in either direction of , we can be 95% confident that this interval contains the true proportion.
This is called a 95% confidence interval.

8. A Confidence Interval (cont.)

9. What Does “95% Confidence” Really Mean?
Each confidence interval uses a sample statistic to estimate a population parameter.
But, since samples vary, the statistics we use, and thus the confidence intervals we construct, vary as well.

10. What Does “95% Confidence” Really Mean?
The figure to the right shows that some of our confidence intervals (from 20 random samples) capture the true proportion (the green horizontal line), while others do not:

11. What Does “95% Confidence” Really Mean?
Our confidence is in the process of constructing the interval, not in any one interval itself.
Thus, we expect 95% of all 95% confidence intervals to contain the true parameter that they are estimating.

12. Margin of Error: Certainty vs. Precision
We can claim, with 95% confidence, that the interval contains the true population proportion.
The extent of the interval on either side of is called the margin of error (ME).
In general, confidence intervals have the form estimate ± ME.
The more confident we want to be, the larger our ME needs to be (makes the interval wider).

13. Margin of Error: Certainty vs. Precision

14. Margin of Error: Certainty vs. Precision
To be more confident, we wind up being less precise.
We need more values in our confidence interval to be more certain.
Because of this, every confidence interval is a balance between certainty and precision.
The tension between certainty and precision is always there.
Fortunately, in most cases we can be both sufficiently certain and sufficiently precise to make useful statements.

15. Margin of Error: Certainty vs. Precision
The choice of confidence level is somewhat arbitrary, but keep in mind this tension between certainty and precision when selecting your confidence level.
The most commonly chosen confidence levels are 90%, 95%, and 99% (but any percentage can be used).

16. Critical Values
The ‘2’ in (our 95% confidence interval) came from the % Rule.
Using a table or technology, we find that a more exact value for our 95% confidence interval is 1.96 instead of 2.
We call 1.96 the critical value and denote it z*.
For any confidence level, we can find the corresponding critical value.

17. Critical Values (cont.)
Example: For a 90% confidence interval, the critical value is 1.645:

18. One-Proportion z-Interval
When the conditions are met, we are ready to find the confidence interval for the population proportion, p.
The confidence interval is
where
The critical value, z*, depends on the particular confidence level, C, that you specify.

23. Confidence Intervals for a Population Mean ; t distributions
t confidence intervals for a population mean 
Sample size required to estimate 

24. Standardize using s for 
Substitute s (sample standard deviation) for  s s s s s s s s
Note quite correct
Not knowing  means using z is no longer correct

25. t-distributions
Suppose that a Simple Random Sample of size n is drawn from a population whose distribution can be approximated by a N(µ, σ) model. When s is known, the sampling model for the mean x is N(m, s/√n), so is approximately Z~N(0,1).
When s is estimated from the sample standard deviation s,
the sampling model for follows a
t distribution with degrees of freedom n − 1.
is the 1-sample t statistic

26. Confidence Interval Estimates
CONFIDENCE INTERVAL for 
where:
t = Critical value from t-distribution with n-1 degrees of freedom
= Sample mean
s = Sample standard deviation
n = Sample size
For small samples (n < 30), the data should follow a Normal model very closely.
For sample sizes larger than 30, t methods are safe to use.

27. t-distributions Very similar to z-distribution
Sometimes called Student’s t distribution
Properties:
i) symmetric around 0 (like z)
ii) degrees of freedom (n – 1)

28. Student’s t Distribution-3 -2 -1 1 2 3 Z

29. Student’s t Distribution-3 -2 -1 1 2 3 Z t
Figure 11.3, Page 372

30. Student’s t Distribution
Degrees of Freedom
n = 2 -3 -2 -1 1 2 3 Z t1
Figure 11.3, Page 372

31. Student’s t Distribution
Degrees of Freedom
n = 8 -3 -2 -1 1 2 3 Z t1 t7
Figure 11.3, Page 372

32. t-Table 90% confidence interval; df = n - 1 = 10 Degrees of Freedom 1
0.80
0.90
0.95
0.98
0.99 1
3.0777
6.314
12.706
31.821
63.657 2
1.8856
2.9200
4.3027
6.9645
9.9250 . . . . . . . . . . . . 10
1.3722
1.8125
2.2281
2.7638
3.1693 . . . . . . . . . . . .
100
1.2901
1.6604
1.9840
2.3642
2.6259
1.282
1.6449
1.9600
2.3263
2.5758

33. Student’s t Distribution
P(t < ) = .05
P(t > ) = .05
.90
.05
.05
t10
1.8125

34. Comparing t and z Critical Values
Conf.
level n = 30
z = % t =
z = % t =
z = % t =
z = % t =

35. Example
An investor is trying to estimate the return on investment in companies that won quality awards last year.
A random sample of 41 such companies is selected, and the return on investment is recorded for each company. The data for the 41 companies have
Construct a 95% confidence interval for the mean return.

37. Example
Because cardiac deaths increase after heavy snowfalls, a study was conducted to measure the cardiac demands of shoveling snow by hand
The maximum heart rates for 10 adult males were recorded while shoveling snow. The sample mean and sample standard deviation were
Assuming the distribution is Normal, find a 90% CI for the population mean max. heart rate for those who shovel snow.

38. Solution

39. EXAMPLE: Consumer Protection Agency
Selected random sample of 16 packages of a product whose packages are marked as weighing 1 pound.
From the 16 packages:
a. find a 95% CI for the mean weight  of the 1-pound packages
b. should the company’s claim that the mean weight  is 1 pound be challenged ?

40. EXAMPLE

41. Choosing type of Interval
Categorical Data: 1-Proportion (Z) Interval
*NO SD is ever given
Quantitative Data: 1-Sample Z Interval
*used when we know sigma (the SD of the population)
Quantitative Data: 1-Sample T Interval
*used when we ONLY know the standard deviation of the sample (s)