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.