Chapter 5. Confidence Interval Estimation - One Population

Confidence Interval and Confidence Level
5.1. Basic Concepts

Critical Value of Standard Normal Distribution
5.2. Confidence Interval Estimation
Intervals Based on the Normal Distribution
CONFIDENCE INTERVAL ESTIMATION: ONE

POPULATION
MSc. Nguyễn Hoàng Huy Tú
December 14, 2023

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Nguyễn Hoàng Huy Tú Confidence Interval Estimation

5.1. Basic Concepts
Let
θ: the population parameter (µ, σ 2 , P).
θ̂: the sample statistics (x, s2 , p̂)
We will use the value of θ̂ to make inference about θ.
Definition
Given the probability α. Confidence Interval Estimator is a rule to
find the specific values a and b such that
P(a < θ < b) = 1 − α.
(a, b) is called the confidence interval.

1 − α is called the confidence level.
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5.1. Basic Concepts
Definition
Let Z ∼ N(0, 1). Given the probability α. The critical value zα is a
value such that
P(Z > zα ) = α
Note that: α = 1 − F(zα ) ⇒ F(zα ) = 1 − α ⇒ zα can be found in

Appendix Table 1. For example, calculate
z0,15 =?
z0,25 =?
z0,75 =?
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5.1. Basic Concepts
Properties
Let Z ∼ N(0, 1). Given the probability α. Then
z1−α = −zα
P(zα1 < Z < zα2 ) = α1 − α2
P(−zα/2 < Z < zα/2 ) = 1 − α
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5.1. Basic Concepts
Selected Confidence Levels and Corresponding Critical

Values
Confidence Level 90% 95% 98% 99%
α 0,1 0,05 0,02 0,01
zα/2 1,645 1,96 2,33 2,58
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5.1. Basic Concepts
Let X1 , X2 , ..., Xn be a random sample of n observations from a

normally distributed population with unknown mean µ and known
variance σ 2 .
From Chapter 4, we know the sampling distribution for sample mean.
That is
X−µ
Z = √ ∼ N(0, 1).
σ/ n
Now, given the confidence level 1 − α. By the property of critical
value, we have
X−µ
P(−zα/2 < √ < zα/2 ) = 1 − α
σ/ n
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5.1. Basic Concepts
We use basic algebra to find the following:
X−µ
1−α = P(−zα/2 < √ < zα/2 )
σ/ n
σ σ
= P(−zα/2 √ < X − µ < zα/2 √ )
n n
σ σ
= P(X − zα/2 √ < µ < X + zα/2 √ )
n n
σ σ
Therefore, (X − zα/2 √ ; X + zα/2 √ ) is the (1 − α) confidence
n n
interval of the population mean.
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For the Mean of a Normal Distribution: Population Variance Known
5.1. Basic Concepts For the Mean of a Normal Distribution: Population Variance Unknown
5.2. Confidence Interval Estimation For Population Proportion
For the Variance of a Normal Distribution
For the Mean of a Normal Distribution: Population

Variance Known
Confidence Interval
Consider a random sample from a normal distribution with mean µ
and variance σ 2 . Given that the variance is known. Then the (1 − α)
confidence interval for the population mean is given by
σ
x ± zα/2 √
n
σ
ME = √ : the margin of error.
n
w = 2ME: the width.
σ
UCL = x + zα/2 √ : the upper confidence limit.
n
σ
LCL = x − zα/2 √ : the lower confidence limit. . . . . . . . . . . . . . . . . . . . .
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Example
A college admissions officer for an MBA program has determined

that historically applicants have undergraduate grade point averages
that are normally distributed with standard deviation 0.45. From a
random sample of 25 applications from the current year, the sample
mean grade point average is 2.90.
a. Find a 95% confidence interval for the population mean.
b. Based on these sample results, a statistician computes for the
population mean a confidence interval extending from 2.81 to 2.99.
Find the confidence level associated with this interval.
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Exercise
Ex 1: A process produces bags of refined sugar. The weights of the
contents of these bags are normally distributed with standard
deviation 1.2 ounces. The contents of a random sample of 25 bags
had a mean weight of 19.8 ounces. Find the upper and lower
confidence limits of a 99% confidence interval for the true mean
weight for all bags of sugar produced by the process.
Ex 2: It is known that the standard deviation in the volumes of

20ounce (591millliliter) bottles of natural spring water bottled by a
particular company is 5 millliliters. One hundred bottles are randomly
sampled and measured.
a. Find the margin of error of a 90% confidence interval estimate for
the population mean volume.
b. Calculate the width for a 98% confidence interval for the
population mean volume. .
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Student’s t Distribution
Definition
Given a random sample of n observations, with mean x and standard
deviation s, from a normally distributed population with mean µ.
Then T follow the Student’s t distribution with (n − 1) degrees of
freedom:
X−µ
T = √ ∼ T(n − 1).
s/ n
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For the Mean of a Normal Distribution: Population

Variance Unknown
Confidence Interval
Suppose there is a random sample of n observations from a normal
distribution with mean µ and unknown variance. Then the (1 − α)
confidence interval for the population mean is given by
s
x ± tn−1,α/2 √
n
The critical value tn−1,α/2 can be found in Appendix Table 8.

s
ME = tn−1,α/2 √ : the margin of error.
n
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Example
A clinic offers a weightloss program. A review of its records found

the following amounts of weight loss, in pounds, for a random sample
of 24 of its clients at the conclusion of a 4month program:
18 25 16 11 15 20 16 19
28 25 26 31 45 40 36 19
28 25 36 16 35 20 16 19
Find a 99% confidence interval for the population mean.
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Exercise
Ex 1: How much do students pay, on the average, for textbooks

during the first semester of college? From a random sample of 400
students the mean cost was found to be $357.75, and the sample
standard deviation was $37.89. Assuming that the population is
normally distributed, find the margin of error of a 95% confidence
interval for the population mean.
Ex 2: A random sample of 16 tires was tested to estimate the average

life of this type of tire under normal driving conditions. The sample
mean and sample standard deviation were found to be 47,500 miles
and 4,200 miles, respectively. Find the UCL and the LCL of a 90%
confidence interval estimate of the mean lifetime of this type of tire if
driven under normal driving conditions.
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Exercise
Ex 3: There is concern about the speed of automobiles traveling over

a particular stretch of highway. For a random sample of 28
automobiles, radar indicated the following speeds, in miles per hour:
59 63 68 57 56 71 59
69 53 58 60 66 51 59
54 64 58 57 66 61 65
70 63 65 57 56 61 59
Assuming a normal population distribution, find the margin of error
of a 95% confidence interval for the mean speed of all automobiles
traveling over this stretch of highway.
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Confidence Interval Estimation for Population Proportion
Confidence Interval
Let p̂ denote the observed proportion of “successes” in a random
sample of n observations from a population with a proportion of
successes P. If n is large enough, then the (1 − α) confidence interval
for the population proportion is given by
√
p̂(1 − p̂)
p̂ ± zα/2 .
n
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Example
Management wants an estimate of the proportion of the corporation’s

employees who favor a modified bonus plan. From a random sample
of 344 employees, it was found that 261 were in favor of this
particular plan. Find a 90% confidence interval estimate of the true
population proportion that favors this modified bonus plan.
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Exercise
Ex 1: From a random sample of 400 registered voters in one city, 320

indicated that they would vote in favor of a proposed policy in an
upcoming election.
a. Calculate the LCL for a 98% confidence interval estimate for the
population proportion in favor of this policy.
b. Calculate the width of a 90% confidence interval estimate for the
population proportion in favor of this policy.
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Confidence Interval Estimation for the Variance of a

Normal Distribution
Confidence Interval
Suppose that there is a random sample of n observations from a
normally distributed population with variance σ 2 . Then the (1 − α)
confidence interval for the population variance is given by
( )
(n − 1)s2 (n − 1)s2
; .
χ2n−1,α/2 χ2n−1,1−α/2
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Example
The manager of Northern Steel, Inc., wants to assess the temperature

variation in the firm’s new electric furnace. It is known that
temperatures are normally distributed. A random sample of 25
temperatures over a 1week period is obtained, and the sample
variance is found to be s2 = 100. Find a 95% confidence interval for
the population variance temperature.
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Exercise
Ex 1: A psychologist wants to estimate the variance of employee test

scores. A random sample of 18 scores had a sample standard deviation
of 10.4. Find a 90% confidence interval for the population variance.
What are the assumptions, if any, to calculate this interval estimate?
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Confidence Interval and Confidence Level

5.1. Basic Concepts

CONFIDENCE INTERVAL ESTIMATION: ONE

MSc. Nguyễn Hoàng Huy Tú

December 14, 2023

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Confidence Interval and Confidence Level

P(a < θ < b) = 1 − α.

(a, b) is called the confidence interval.

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Critical Value of Standard Normal Distribution

Note that: α = 1 − F(zα ) ⇒ F(zα ) = 1 − α ⇒ zα can be found in

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Critical Value of Standard Normal Distribution

P(zα1 < Z < zα2 ) = α1 − α2

P(−zα/2 < Z < zα/2 ) = 1 − α

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Selected Confidence Levels and Corresponding Critical

Confidence Level 90% 95% 98% 99%

α 0,1 0,05 0,02 0,01

zα/2 1,645 1,96 2,33 2,58

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Intervals Based on the Normal Distribution

Let X1 , X2 , ..., Xn be a random sample of n observations from a

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Intervals Based on the Normal Distribution

We use basic algebra to find the following:

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

For the Mean of a Normal Distribution: Population

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

A college admissions officer for an MBA program has determined

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Ex 2: It is known that the standard deviation in the volumes of

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

For the Mean of a Normal Distribution: Population

The critical value tn−1,α/2 can be found in Appendix Table 8.

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

A clinic offers a weight­loss program. A review of its records found

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Ex 1: How much do students pay, on the average, for textbooks

Ex 2: A random sample of 16 tires was tested to estimate the average

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Ex 3: There is concern about the speed of automobiles traveling over

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Confidence Interval Estimation for Population Proportion

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Management wants an estimate of the proportion of the corporation’s

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Ex 1: From a random sample of 400 registered voters in one city, 320

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Confidence Interval Estimation for the Variance of a

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

The manager of Northern Steel, Inc., wants to assess the temperature

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

Ex 1: A psychologist wants to estimate the variance of employee test

Nguyễn Hoàng Huy Tú Confidence Interval Estimation

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A clinic offers a weightloss program. A review of its records found