1. Introduction to Probability and Statistics Thirteenth Edition Chapter 8 Large and Small-Sample Estimation

2. Large sample estimation

3. Population (Size of population = N) Sample number 1 Sample number 2 Sample number 3 Sample number N C n Each sample size = n

4.  Populations are described by their probability distributions and parameters.  For quantitative populations, the location and shape are described by  and .  For a binomial populations, the location and shape are determined by p.  If the values of parameters are unknown, we make inferences about them using sample information.

5. Types of Inference Estimation:Estimation: –Estimating or predicting the value of the parameter – – “What is (are) the most likely values of m or p?” Hypothesis Testing:Hypothesis Testing: –Deciding about the value of a parameter based on some preconceived idea. –“Did the sample come from a population with  = 5 or p = 0.2?”

6. Examples:Examples: –A consumer wants to estimate the average price of similar homes in her city before putting her home on the market. Estimation: Estimation: Estimate , the average home price. Hypothesis test Hypothesis test: Is the new average resistance,   equal to the old average resistance,    –A manufacturer wants to know if a new type of steel is more resistant to high temperatures than an old type was. Types of Inference

7. Whether you are estimating parameters or testing hypotheses, statistical methods are important because they provide: –Methods for making the inference –A numerical measure of the goodness or reliability of the inference Types of Inference

8.  An unknown population proportion p  An unknown population mean   ? p?

9. estimator  An estimator is a rule, usually a formula, that tells you how to calculate the estimate based on the sample.  Point estimation:  Point estimation: A single number is calculated to estimate the parameter.  Interval estimation:  Interval estimation: Two numbers are calculated to create an interval within which the parameter is expected to lie.

10. A. Point Estimators sampling distribution.  Since an estimator is calculated from sample values, it varies from sample to sample according to its sampling distribution. estimatorunbiased  An estimator is unbiased if the mean of its sampling distribution equals the parameter of interest.  It does not systematically overestimate or underestimate the target parameter. Properties

11. unbiased smallest spreadvariability  Of all the unbiased estimators, we prefer the estimator whose sampling distribution has the smallest spread or variability. Properties

12. Measuring the Goodness of an Estimator error of estimation. o The distance between an estimate and the true value of the parameter is the error of estimation. The distance between the bullet and the bull’s-eye. unbiased normal o When the sample sizes are large, our unbiased estimators will have normal distributions. Because of the Central Limit Theorem.

13. The Margin of Error  Margin of error:  Margin of error: The maximum error of estimation, is the maximum likely difference observed between sample mean x and true population mean µ, calculated as : 1.645 1.96 2.33 2.575

14. Margin of Error is the maximum likely difference observed between sample mean x and true population mean µ. denoted by E µ x + E x - E x -E < µ < x +E lower limit Definition upper limit

15. Definition Margin of Error µ x + E x - E also called the maximum error of the estimate E = z  /2  n

16. Estimating Means and Proportions For a quantitative population, For a binomial population, 1.645 1.96 2.33 2.575 SE

17. Example A homeowner randomly samples 64 homes similar to her own and finds that the average selling price is $252,000 with a standard deviation of $15,000. Estimate the average selling price for all similar homes in the city.

18. A quality control technician wants to estimate the proportion of soda cans that are underfilled. He randomly samples 200 cans of soda and finds 10 underfilled cans. Example

20. A random sample of n = 500 observations from a binomial population produced x = 450 successes. Estimate the binomial proportion p and calculate the 90% margin of error Example

21. Create an interval (a, b) so that you are fairly sure that the parameter lies between these two values. confidence coefficient, 1- .“Fairly sure” is means “with high probability”, measured using the confidence coefficient, 1- . Usually, 1-  Suppose 1-  =.95 and that the estimator has a normal distribution. Parameter  1.96SE

22. Since we don’t know the value of the parameter, consider which has a variable center. Only if the estimator falls in the tail areas will the interval fail to enclose the parameter. This happens only 5% of the time. Estimator  1.96 SE Worked Failed

24. TO CHANGE THE CONFIDENCE LEVEL To change to a general confidence level, 1- , pick a value of z that puts area 1-  in the center of the z distribution. 100(1-  )% Confidence Interval: Estimator  z  SE Tail areaz  /2.051.645.0251.96.012.33.0052.575

25. 1. CONFIDENCE INTERVALS FOR MEANS AND PROPORTIONS For a quantitative population, For a binomial population, 1.96

26. A random sample of n = 50 males showed a mean average daily intake of dairy products equal to 756 grams with a standard deviation of 35 grams. Find a 95% confidence interval for the population average . 1.96

27. Find a 99% confidence interval for , the population average daily intake of dairy products for men. The interval must be wider to provide for the increased confidence that is does indeed enclose the true value of . 2.575

28. Of a random sample of n = 150 college students, 104 of the students said that they had played on a soccer team during their K-12 years. Estimate the proportion of college students who played soccer in their youth with a 98% confidence interval. 2.33

29. 2. E STIMATING THE D IFFERENCE BETWEEN T WO M EANS  Sometimes we are interested in comparing the means of two populations. The average growth of plants fed using two different nutrients. The average scores for students taught with two different teaching methods.  To make this comparison,

30. We compare the two averages by making inferences about  1 -  2, the difference in the two population averages. If the two population averages are the same, then  1 -  2 = 0. The best estimate of  1 -  2 is the difference in the two sample means, E STIMATING THE D IFFERENCE BETWEEN T WO M EANS (C ONT ’ D )

31. T HE S AMPLING D ISTRIBUTION OF Properties of the Sampling Distribution of Expected Value Standard Deviation/Standard Error where:  1 = standard deviation of population 1  2 = standard deviation of population 2 n 1 = sample size from population 1 n 2 = sample size from population 2

32. I NTERVAL E STIMATE OF  1 -  2 : L ARGE -S AMPLE C ASE ( n 1 > 30 AND n 2 > 30)  Interval Estimate with  1 and  2 Known where: 1 -  is the confidence coefficient  Interval Estimate with  1 and  2 Unknown where: SE

33. E XAMPLE Compare the average daily intake of dairy products of men and women using a 95% confidence interval. Avg Daily IntakesMenWomen Sample size50 Sample mean756762 Sample Std Dev3530 1.96

34. Could you conclude, based on this confidence interval, that there is a difference in the average daily intake of dairy products for men and women?  1 -  2 = 0.  1 =  2.The confidence interval contains the value  1 -  2 = 0. Therefore, it is possible that  1 =  2. You would not want to conclude that there is a difference in average daily intake of dairy products for men and women. E XAMPLE ( CONT ’ D )

35. 3. Estimating the Difference between Two Proportions  Sometimes we are interested in comparing the proportion of “successes” in two binomial populations. The germination rates of untreated seeds and seeds treated with a fungicide. The proportion of male and female voters who favor a particular candidate for governor.  To make this comparison,

36. We compare the two proportions by making inferences about p 1 -p 2, the difference in the two population proportions. If the two population proportions are the same, then p 1 -p 2 = 0. The best estimate of p 1 -p 2 is the difference in the two sample proportions, Estimating the Difference between Two Proportions (cont’d)

37. The Sampling Distribution of Expected Value/mean Standard Deviation/Standard Error Distribution Form If the sample sizes are large (n 1 p 1, n 1 q 1, n 2 p 2, n 2 q 2 ) are all greater than to 5), the sampling distribution of can be approximated by a normal probability distribution.

38. Interval Estimate of p 1 - p 2 : Large-Sample Case

39. Example Compare the proportion of male and female college students who said that they had played on a soccer team during their K-12 years using a 99% confidence interval. Youth SoccerMaleFemale Sample size8070 Played soccer6539 2.575

40. Could you conclude, based on this confidence interval, that there is a difference in the proportion of male and female college students who said that they had played on a soccer team during their K-12 years? p 1 -p 2 = 0. p 1 = p 2.The confidence interval does not contains the value p 1 -p 2 = 0. Therefore, it is not likely that p 1 = p 2. You would conclude that there is a difference in the proportions for males and females. A higher proportion of males than females played soccer in their youth. Example (cont’d)

41. two- sided  Confidence intervals are by their nature two- sided since they produce upper and lower bounds for the parameter.  One-sided bounds  One-sided bounds can be constructed simply by using a value of z that puts a rather than  /2 in the tail of the z distribution.

42.  The total amount of relevant information in a sample is controlled by two factors: sampling planexperimental design  The sampling plan or experimental design: the procedure for collecting the information sample size n  The sample size n: the amount of information you collect. margin of error width of the confidence interval.  In a statistical estimation problem, the accuracy of the estimation is measured by the margin of error or the width of the confidence interval.

43. 1. Determine the size of the margin of error, E, that you are willing to tolerate. 2. Choose the sample size by solving for n or n  n 1  n 2 in the inequality: 1.96 SE  E, where SE is a function of the sample size n. s   Range / 4. 3. For quantitative populations, estimate the population standard deviation using a previously calculated value of s or the range approximation   Range / 4. p .5 4. For binomial populations, use the conservative approach and approximate p using the value p .5.

44. A producer of PVC pipe wants to survey wholesalers who buy his product in order to estimate the proportion who plan to increase their purchases next year. What sample size is required if he wants his estimate to be within 0.04 of the actual proportion with probability equal to 0.95? He should survey at least 600 wholesalers.

45. 4. Estimating the Variance The sample variance is defined by

46. Analysis of Sample Variance If s 2 is the variance of a random sample size n from a normal population, a 100(1-  )% confidence interval for  2 is Where and are values with (n-1) degrees of freedom.

47. Small sample estimation

48.  Take sample of 15 patrons from our library sample  Mean 41.64  Standard deviation 40.13  Number of cases 15  Find 95 percent confidence interval  t value, from table, for 14 degrees of freedom, 2.145

49. Values of t 

50. Interval Estimate of  1 -  2 : Small -Sample Case ( n 1 < 30 and/or n 2 < 30) Interval Estimate with  2 Known where:

51. Interval Estimate of  1 -  2 : Small -Sample Case ( n 1 < 30 and/or n 2 < 30)  Interval Estimate with  2 Unknown

52. Example: Specific Motors Specific Motors of Detroit has developed a new automobile known as the M car. 12 M cars and 8 J cars (from Japan) were road tested to compare miles-per- gallon (mpg) performance. It is assumed that both populations have equal variances. The sample statistics are: Sample #1 Sample #2 M Cars J Cars Sample Size n 1 = 12 cars n 2 = 8 cars Mean = 29.8 mpg = 27.3 mpg Standard Deviation s 1 = 2.56 mpg s 2 = 1.81 mpg

53.  Point Estimate of the Difference Between Two Population Means  1 = mean miles-per-gallon for the population of M cars  2 = mean miles-per-gallon for the population of J cars Point estimate of  1 -  2 = = 29.8 - 27.3 = 2.5 mpg. Example: Specific Motors

54.  95% Confidence Interval Estimate of the Difference Between Two Population Means: Small-Sample Case We will make the following assumptions:  The miles per gallon rating must be normally distributed for both the M car and the J car.  The variance in the miles per gallon rating must be the same for both the M car and the J car.  Using the t distribution with n 1 + n 2 - 2 = 18 degrees of freedom, the appropriate t value is t.025 = 2.101.  We will use a weighted average of the two sample variances as the pooled estimator of  2. Example: Specific Motors

55.  95% Confidence Interval Estimate of the Difference Between Two Population Means: Small-Sample Case = 2.5 + 2.2 or.3 to 4.7 miles per gallon. We are 95% confident that the difference between the mean mpg ratings of the two car types is from.3 to 4.7 mpg (with the M car having the higher mpg). Example: Specific Motors

56. Key Concepts I. Types of Estimators 1. Point estimator: a single number is calculated to estimate the population parameter. Interval estimator 2. Interval estimator: two numbers are calculated to form an interval that contains the parameter. II. Properties of Good Estimators 1. Unbiased: the average value of the estimator equals the parameter to be estimated. 2. Minimum variance: of all the unbiased estimators, the best estimator has a sampling distribution with the smallest standard error. 3. The margin of error measures the maximum distance between the estimator and the true value of the parameter.

57. Key Concepts III. Large-Sample Point Estimators To estimate one of four population parameters when the sample sizes are large, use the following point estimators with the appropriate margins of error.

58. Key Concepts IV. Large-Sample Interval Estimators To estimate one of four population parameters when the sample sizes are large, use the following interval estimators.

59. Key Concepts 1.All values in the interval are possible values for the unknown population parameter. 2.Any values outside the interval are unlikely to be the value of the unknown parameter. 3.To compare two population means or proportions, look for the value 0 in the confidence interval. If 0 is in the interval, it is possible that the two population means or proportions are equal, and you should not declare a difference. If 0 is not in the interval, it is unlikely that the two means or proportions are equal, and you can confidently declare a difference. V. One-Sided Confidence Bounds Use either the upper (  ) or lower (  ) two-sided bound, with the critical value of z changed from z  / 2 to z .