Chapter 8 - Confidence Interval Estimation
σ Known
Assumptions Population standard deviation σ is known Population is normally distributed If population is not normal, use large sample
Confidence Level
the interval will contain the unknown population parameter A percentage (less than 100%) Example: Suppose confidence level = 95% Also written (1 - a) = 0.95, (so a = 0.05)
2 types of population mean
σ Known and σ Unknown
σ unKnown
Assumptions Population standard deviation is unknown Population is normally distributed If population is not normal, use large sample
2 types of Confidence intervals
Population mean and Population Portion
Critical Value
is a table value based on the sampling distribution of the point estimate and the desired confidence level
Point estimate
is a single number
Point Estimate
is the sample statistic estimating the population parameter of interest
Standard Error
is the standard deviation of the point estimate
Confidence interval
provides additional information about the variability of the estimate. gives a range of values. Takes into consideration variation in sample statistics from sample to sample Based on observations from 1 sample Gives information about closeness to unknown population parameters Stated in terms of level of confidence e.g. 95% confident, 99% confident Can never be 100% confident
Interval estimate
provides more information about a population characteristic than does a point estimate.