1. 7.1 - 1 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Chapter 7 Estimates and Sample Sizes 7-1 Review and Preview 7-2 Estimating a Population Proportion 7-3 Estimating a Population Mean: Known 7-4 Estimating a Population Mean: Not Known 7-5 Estimating a Population Variance

2. 7.1 - 2 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Section 7-2 Estimating a Population Proportion

3. 7.1 - 3 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Definition A point estimate is a single value (or point) used to approximate a population parameter.

4. 7.1 - 4 Copyright © 2010, 2007, 2004 Pearson Education, Inc. The sample proportion is the best point estimate of the population proportion. Definition

5. 7.1 - 5 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Definition A confidence interval (or interval estimate) is a range (or an interval) of values used to estimate the true value of a population parameter. A confidence interval is sometimes abbreviated as CI.

6. 7.1 - 6 Copyright © 2010, 2007, 2004 Pearson Education, Inc. A confidence level is the probability (often expressed as the equivalent percentage value) that the confidence interval actually does contain the population parameter, assuming that the estimation process is repeated a large number of times. (The confidence level is also called degree of confidence, or the confidence coefficient.) Most common choices are 90%, 95%, or 99%. Definition

7. 7.1 - 7 Copyright © 2010, 2007, 2004 Pearson Education, Inc. We must be careful to interpret confidence intervals correctly. There is a correct interpretation and many different and creative incorrect interpretations of the confidence interval. “We are 95% confident that the interval from 0.677 to 0.723 actually does contain the true value of the population proportion.” This means that if we were to select many different samples of size 1501 and construct the corresponding confidence intervals, 95% of them would actually contain the value of the population proportion. Interpreting a Confidence Interval

8. 7.1 - 8 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Definition A critical value is the number on the borderline separating sample statistics that are likely to occur from those that are unlikely to occur. The number is a critical value that is a z score with the property that it separates an area of in the right tail of the standard normal distribution.

9. 7.1 - 9 Copyright © 2010, 2007, 2004 Pearson Education, Inc. The Critical Value

10. 7.1 - 10 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Finding for a 95% Confidence Level Critical Values

11. 7.1 - 11 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Examples a)Compute the critical value that corresponds to a 90% level of confidence. b)Compute the critical value that corresponds to an 82% level of confidence. c)Find the critical value that corresponds to  = 0.02

12. 7.1 - 12 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Margin of Error for Proportions

13. 7.1 - 13 Copyright © 2010, 2007, 2004 Pearson Education, Inc. = population proportion Confidence Interval for Estimating a Population Proportion = sample proportion = number of sample values = margin of error = z score separating an area of in the right tail of the standard normal distribution

14. 7.1 - 14 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Confidence Interval for Estimating a Population Proportion 1. The sample is a simple random sample. 2. The conditions for the binomial distribution are satisfied: there is a fixed number of trials, the trials are independent, there are two categories of outcomes, and the probabilities remain constant for each trial. 3. There are at least 5 successes and 5 failures.

15. 7.1 - 15 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Confidence Interval for Estimating a Population Proportion where

16. 7.1 - 16 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Confidence Interval for Estimating a Population Proportion

17. 7.1 - 17 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Round-Off Rule for Confidence Interval Estimates of Round the confidence interval limits for to three significant digits.

18. 7.1 - 18 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Use the TI-83/84 calculator. Stat > Tests > 1-PropZInt Enter the values of x, n, C-level Procedure for Constructing a Confidence Interval for

19. 7.1 - 19 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Example: In a survey of 1002 people, 701 said that they voted in a recent election. a) Find a 99% confidence interval estimate for the proportion of people who say that they voted. b) Voting records show that 61% of the eligible voters actually did vote. Are the survey results consistent with the actual voter turnout?

20. 7.1 - 20 Copyright © 2010, 2007, 2004 Pearson Education, Inc. In a study of 1228 randomly selected medical malpractice lawsuits, it is found that 856 of them were later dropped or dismissed. a)What is the best point estimate of the proportion of medical malpractice lawsuits that are dropped or dismissed? b)Construct a 99% confidence interval estimate of the proportion of medical malpractice lawsuits that are dropped or dismissed? c)Does it appear that the majority of such suits are dropped or dismissed? Example:

21. 7.1 - 21 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Analyzing Polls When analyzing polls consider: 1.The sample should be a simple random sample, not an inappropriate sample (such as a voluntary response sample). 2.The confidence level should be provided. (It is often 95%, but media reports often neglect to identify it.) 3.The sample size should be provided. (It is usually provided by the media, but not always.) 4.Except for relatively rare cases, the quality of the poll results depends on the sampling method and the size of the sample, but the size of the population is usually not a factor.

22. 7.1 - 22 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Caution Never follow the common misconception that poll results are unreliable if the sample size is a small percentage of the population size. The population size is usually not a factor in determining the reliability of a poll.

23. 7.1 - 23 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Sample Size Suppose we want to collect sample data in order to estimate some population proportion. The question is how many sample items must be obtained?

24. 7.1 - 24 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Determining Sample Size (solve for n by algebra)

25. 7.1 - 25 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Sample Size for Estimating Proportion When an estimate of is known: When no estimate of is known:

26. 7.1 - 26 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Round-Off Rule for Determining Sample Size If the computed sample size n is not a whole number, round the value of n up to the next larger whole number.

27. 7.1 - 27 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Example: The Internet is affecting us all in many different ways, so there are many reasons for estimating the proportion of adults who use it. Assume that a manager for E-Bay wants to determine the current percentage of U.S. adults who now use the Internet. How many adults must be surveyed in order to be 95% confident that the sample percentage is in error by no more than three percentage points? a.In 2006, 73% of adults used the Internet. b.No known possible value of the proportion.

28. 7.1 - 28 Copyright © 2010, 2007, 2004 Pearson Education, Inc. a)Use To be 95% confident that our sample percentage is within three percentage points of the true percentage for all adults, we should obtain a simple random sample of 842 adults. Example:

29. 7.1 - 29 Copyright © 2010, 2007, 2004 Pearson Education, Inc. b)Use To be 95% confident that our sample percentage is within three percentage points of the true percentage for all adults, we should obtain a simple random sample of 1068 adults. Example:

30. 7.1 - 30 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Finding the Point Estimate and from a Confidence Interval Margin of Error: = (upper confidence limit) — (lower confidence limit) 2 Point estimate of : = (upper confidence limit) + (lower confidence limit) 2

31. 7.1 - 31 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Example: If 0.420 < p < 0.488, find = ? E = ?

32. 7.1 - 32 Copyright © 2010, 2007, 2004 Pearson Education, Inc. Recap In this section we have discussed:  Point estimates.  Confidence intervals.  Confidence levels.  Critical values.  Margin of error.  Determining sample sizes.