Interval Estimation
Interval Estimation
Interval Estimation
ESTIMATION
POINT ESTIMATION
95% of all
x bar values
1.96σxbar µ 1.96σxbar
σxbar = 2
sampling distribution of x bar
95% of all
x bar values
µ
σxbar = 2
3.92 3.92
xbar1
xbar2
xbar3
interpretation of interval
estimate
• In CJW case, n = 100 customers; x bar = 82; using xbar
± margin of error, we got 82 ± 3.92 .
• s = √(∑(xi - x bar)2 / (n - 1)
• Degrees of freedom refers to number of independent
pieces of information that goes into the computation
of ∑(xi - x bar)2
• Actually n pieces of information that goes into the
computation of numerator are x1 - x bar, x2 - x bar,
......, xn - x bar.
• And we also know that ∑(xi - x bar) = 0
t distribution