1. ESTIMATION OF THE MEAN

2. 2 INTRO :: ESTIMATION Definition The assignment of plausible value(s) to a population parameter based on a value of a sample statistic is called estimation.

3. 3 INTRO :: ESTIMATION The sample statistic used to estimate a population parameter is called estimator. Examples … sample mean estimator population mean …

4. 4 INTRO :: ESTIMATION 1. Select a sample. 2. Collect the required information from the members of the sample. 3. Calculate the value of the sample statistic. 4. Assign plausible value(s) to the corresponding population parameter. The estimation procedure involves …

5. 5 POINT ESTIMATES & INTERVAL ESTIMATES A Point Estimate An Interval Estimate

6. 6 A Point Estimate Definition The value of a sample statistic that is used to estimate a population parameter is called a point estimate.

7. 7 INTERVAL ESTIMATES Usually, whenever we use point estimation, we calculate the margin of error associated with that point estimation. Point Estimate w/out M.E. not very useful!!!!

8. 8 Interval Estimates Definition In interval estimation, an interval is constructed around the point estimate, and it is stated that this interval is likely to contain the corresponding population parameter. Gives a range of plausible values for the parameter of interest.

9. 9 Interval estimation. $1130$1610

10. 10 Interval Estimates Definition Each interval is constructed with regard to a given confidence level and is called a confidence interval. The confidence level associated with a confidence interval states how much confidence we have that this interval contains the true population parameter. The confidence level is denoted by (1 – α)100%.

11. 11 INTERVAL ESTIMATION OF A POPULATION MEAN: The t Distribution Confidence Interval for μ Using the t Distribution

12. 12 The t Distribution Conditions Under Which the t Distribution Is Used to Make a Confidence Interval About μ The t distribution is used to make a confidence interval about μ if 1. The population from which the sample is drawn is (approximately) normally distributed. 2. The population standard deviation, σ, unknown.

13. 13 The t Distribution cont. The t distribution is a specific type of bell- shaped distribution with a lower height and a wider spread than the standard normal distribution. As the sample size becomes larger, the t distribution approaches the standard normal distribution. The t distribution has only one parameter, called the degrees of freedom ( df ). The mean of the t distribution is equal to 0 and its standard deviation is.

14. 14 The t distribution for df = 9 and the standard normal distribution. μ = 0 The standard deviation of the standard normal distribution is 1.0 The standard deviation of the t distribution is

15. 15 Example Find the value of t for 16 degrees of freedom and.05 area in the right tail of a t distribution curve.

16. 16 Determining t for 16 df and.05 Area in the Right Tail Area in the Right Tail Under the t Distribution Curve df.10.05.025….001 1 2 3. 16. 3.078 1.886 1.638 … 1.337 … 6.314 2.920 2.353 … 1.746 … 12.706 4.303 3.182 … 2.120 … ……………………………… 318.309 22.327 10.215 … 3.686 … Area in the right tail df The required value of t for 16 df and.05 area in the right tail

17. 17 The value of t for 16 df and.05 area in the right tail. df = 16 0 1.746.05 t This is the required value of t

18. 18 The value of t for 16 df and.05 area in the left tail. df = 16 0 -1.746.05 t

19. 19 Confidence Interval for μ Using the t Distribution The (1 – α )100% confidence interval for μ is The value of t is obtained from the t distribution table for n – 1 degrees of freedom and the given confidence level.

20. 20 Examples …