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**Chapter 8b Sample size for an interval estimate of a population mean.**

Interval estimation of a population proportion. Sample size for an interval estimate of a population proportion.

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**Sample Size for an Interval Estimate of a Population Mean**

Let E = the maximum sampling error mentioned in the precision statement. E is the amount added to and subtracted from the point estimate to obtain an interval estimate. E is often referred to as the margin of error.

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**Sample Size for an Interval Estimate of a Population Mean**

Margin of Error Necessary Sample Size

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**Sample Size for an Interval Estimate of a Population Mean**

D Recall that Discount Sounds is evaluating a potential location for a new retail outlet, based in part, on the mean annual income of the individuals in the marketing area of the new location. Suppose that Discount Sounds’ management team wants an estimate of the population mean such that there is a .95 probability that the sampling error is $500 or less. How large a sample size is needed to meet the required precision?

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**Sample Size for an Interval Estimate of a Population Mean**

D At 95% confidence, z.025 = Recall that = 4,500. A sample of size 312 is needed to reach a desired precision of + $500 at 95% confidence.

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**Interval Estimation of a Population Proportion**

Normal Approximation of Sampling Distribution of When np > 5 and n(1 – p) > 5 Sampling distribution of /2 1 - of all values /2 p

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**Interval Estimation of a Population Proportion**

Interval Estimate where: is the confidence coefficient z/2 is the z value providing an area of /2 in the upper tail of the standard normal probability distribution is the sample proportion

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**Example: Political Science, Inc.**

Interval Estimation of a Population Proportion Political Science, Inc. (PSI) specializes in voter polls and surveys designed to keep political office seekers informed of their position in a race. Using telephone surveys, PSI interviewers ask registered voters who they would vote for if the election were held that day.

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**Example: Political Science, Inc.**

Interval Estimation of a Population Proportion In a current election campaign, PSI has just found that 220 registered voters, out of 500 contacted, favor a particular candidate. PSI wants to develop a 95% confidence interval estimate for the proportion of the population of registered voters that favor the candidate.

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**of a Population Proportion**

Interval Estimation of a Population Proportion where: n = 500, = 220/500 = .44, z/2 = 1.96 = PSI is 95% confident that the proportion of all voters that favor the candidate is between and

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**Using Excel to Construct a Confidence Interval**

Formula Worksheet Note: Rows are not shown.

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**Using Excel to Construct a Confidence Interval**

Value Worksheet Note: Rows are not shown.

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**Sample Size for an Interval Estimate of a Population Proportion**

Margin of Error Necessary Sample Size

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**Sample Size for an Interval Estimate of a Population Proportion**

Suppose that PSI would like a .99 probability that the sample proportion is within of the population proportion. How large a sample size is needed to meet the required precision?

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**Sample Size for an Interval Estimate of a Population Proportion**

At 99% confidence, z.005 = Recall that = .44. A sample of size 1817 is needed to reach a desired precision of at 99% confidence.

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**Sample Size for an Interval Estimate of a Population Proportion**

Note: We used .44 as the best estimate of p in the preceding expression. If no information is available about p, then .5 is often assumed because it provides the highest possible sample size. If we had used p = .5, the recommended n would have been 1843.

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Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 8-1 Chapter 8 Confidence Interval Estimation Business Statistics, A First Course.

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