CHAPTER 8 ESTIMATION
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1 CHAPTER 8 ESTIMATION CONFIDENCE INTERVALS FOR A MEAN OR FOR A PROPORTION (SECTIONS OF UNDERSTANDABLE STATISTICS) Student s t Distribution In Section 8.1 of Understandable Statistics, confidence intervals for µ when σ is known are presented. In Section 8.2, Student s t distribution is introduced and confidence intervals for µ when σ is unknown are discussed. If the value of σ is unknown then the x distribution follows the Student s t distribution with degrees of freedom (n 1). x µ t = s n There is a different Student s t distribution for every degree of freedom. MINITAB includes Student s t distribution in its library of probability distributions. You may use the RANDOM, PDF, CDF, INVCDF commands with Student s t distribution as the specified distribution. Menu selection: Calc Probability Distributions t Dialog Box Responses Select from Probability Density (PDF), Cumulative Probability (CDF), Inverse Cumulative Probability (INVCDF) Degrees of Freedom: enter value Input Column: Column containing values for which you wish to compute the probability and optional storage column Input Constant: If you want the probability of just one value, use a constant rather than an entire column. Designate optional storage constant or column. For CDF and INVCDF, set the value of Noncentrality parameter to be 0. You can graph different t-distributions by using Graph Scatterplot. Follow steps similar to those given in Chapter 6 for graphing a normal distribution. Student s t distribution is symmetric and centered at 0. Select X values from about 4 to 4 in increments of 0.10 and place the values in a column, say C1. Then use Calc Probability Distributions t with Probability Density to generate a column, say C2, of Y values. The graph shown represents 10 degrees of freedom. 234
2 Part III: MINITAB Guide 235 Student s Distribution with 10 Degrees of Freedom Confidence Intervals for Means Confidence intervals for µ depend on the sample size n, and knowledge about the standard deviation σ. For small samples we assume the x distribution is approximately normal (mound-shaped and symmetric). When sample size is large, we do not need to make assumptions on the x distribution. The relationship between confidence intervals for µ, sample size, and knowledge about σ are shown in the table below. Large samples Small samples from an approximately normal distribution Confidence Interval σ is known σ is unknown σ σ x z to x + z n n x t s s to x + t n n
3 236 Technology Guide Understandable Statistics, 8th Edition In MINITAB we can generate confidence intervals for µ by using the menu selections. Stat Basic Statistics 1-sample z Dialog Box Responses Samples in columns: Designate the column number C# containing the data. or, Summarized data: Enter sample size and sample mean. For confidence Interval: Click on [Options], then enter the confidence level, such as 90%. Test Mean: Leave blank at this time. We will use the option in Chapter 9. Standard deviation: Enter the value of σ. Note that MINITAB requires knowledge of σ before you can use the normal distribution for confidence intervals. Graphs: You can select from histogram, individual value plot, or box plot of sample data. Stat Basic Statistics 1-sample t Dialog Box Responses Samples in columns: Designate the column number C# containing the data. or, Summarized data: Enter sample size, sample mean, and sample standard deviation. For confidence Interval: Click on [Options], then enter the confidence level, such as 90%. Test Mean: Leave blank at this time. We will use this option in Chapter 9. Graphs: You can select from histogram, individual value plot, or box plot of sample data. Example The manager of First National Bank wishes to know the average waiting times for student loan application action. A random sample of 20 applications showed the waiting times from application submission (in days) to be Find a 90% confidence interval for the population mean of waiting times. In this example, the value of σ is not known. We need to use Student s t distribution. Enter the data into column C1 and name the column Days. Use the menu selection Stat Basic Statistics 1- sample t.
4 Part III: MINITAB Guide 237 The results are
5 238 Technology Guide Understandable Statistics, 8th Edition Confidence Intervals for Proportions This option is in more recent versions of MINITAB including Version 14. Menu selection Stat Basic Statistics 1 Proportion Dialog Box Responses Select the option of Summarized Data. Number of Trials: Enter value (n in Understandable Statistics) Number of Events: Enter value of successes (r in Understandable Statistics) Click on [Options]; enter confidence level and click on Use test and interval based on normal distribution. In Chapter 9 we will see how to interpret the results from this test. Example The public television station BPBS wants to find the percent of its viewing population who give donations to the station. A random sample of 300 viewers was surveyed and it was found that 123 made contributions to the station. Find a 95% confidence interval for the probability that a viewer of BPBS selected at random contributions to the station. Use the menu selection Stat Basic Statistics 1 Proportion. Click on Summarized Data. Use 300 for number of trials and 123 for number of events. Click on [Options]. Enter 95 for the confidence level.
6 Part III: MINITAB Guide 239 The results follow. The output regarding test of p, Z-value, and P-value will be discussed in Chapter 9. Confidence Intervals for Difference of Means or Difference of Proportions In MINITAB, confidence intervals for difference of means and difference of proportions are included in the menu selection for tests of hypothesis for difference of means and tests of hypothesis for difference of proportions respectively. These menu selections with their dialog boxes will be discussed in Chapter 9. LAB ACTIVITIES FOR CONFIDENCE INTERVALS FOR A MEAN OR FOR A PROPORTION 1. Snow King Ski resorts is considering opening a downhill ski slope in Montana. To determine if there would be an adequate snow base in November in the particular region under consideration, they studied snowfall records for the area over the last 100 years. They took a random sample of 15 years. The snowfall during November for the sample years was (in inches): (a) To find a confidence interval for µ, do we use a normal distribution or Student s t distribution?
7 240 Technology Guide Understandable Statistics, 8th Edition (b) Find a 90% confidence interval for the mean snowfall. (c) Find a 95% confidence interval for the mean snowfall. (d) Compare the intervals of parts (b) and (c). Which one is narrower? Why would you expect this? 2. Consider the snowfall data of problem 1. Suppose you knew that the snowfall in the region under consideration for the ski area in Montana (see problem 1) had a population standard deviation of 8 inches. (a) Since you know σ, (and the distribution of snowfall is assumed to be approximately normal) do you use the normal distribution or Student s t for confidence intervals? (b) Find a 90% confidence interval for the mean snowfall. (c) Find a 95% confidence interval for the mean snowfall. (d) Compare the respective confidence intervals created in problem 1 and in this problem. Of the 95% intervals, which is longer, the one using the t distribution or the one using the normal distribution? Why would you expect this result? 3. Retrieve the worksheet Svls01.mpt from the CD-ROM. This worksheet contains the number of shares of Disney Stock (in hundreds of shares) sold for a random sample of 60 trading days in 1993 and The data is in column C1. Use the sample standard deviation computed with menu options Stat Basic Statistics Display Descriptive Statistics as the value of σ. You will need to compute this value first, and then enter it as a number in the dialog box for 1-sample z. (a) Find a 99% confidence interval for the population mean volume. (b) Find a 95% confidence interval for the population mean volume. (c) Find a 90% confidence interval for the population mean volume. (d) Find an 85% confidence interval for the population mean volume. (d) What do you notice about the lengths of the intervals as the confidence level decreases? 4. There are many types of errors that will cause a computer program to terminate or give incorrect results. One type of error is punctuation. For instance, if a comma is inserted in the wrong place, the program might not run. A study of programs written by students in a beginning programming course showed that 75 out of 300 errors selected at random were punctuation errors. Find a 99% confidence interval for the proportion of errors made by beginning programming students that are punctuation errors. Next, find a 90% confidence interval. Is this interval longer or shorter? 5. Sam decided to do a statistics project to determine a 90% confidence interval for the probability that a student at West Plains College eats lunch in the school cafeteria. He surveyed a random sample of 12 students and found that 9 ate lunch in the cafeteria. Can Sam use the program to find a confidence interval for the population proportion of students eating in the cafeteria? Why or why not? Try the program with N = 12 and R = 9. What happens? What should Sam do to complete his project?
8 Part III: MINITAB Guide 241 COMMAND SUMMARY Probability Distribution Subcommand T K is the subcommand that calls up Student s t distribution with specified degrees of freedom K. This subcommand may be used with RANDOM, PDF, CDF, INVCDF. WINDOWS menu selection: Calc Probability Distributions t In the dialog box select PDF, CDF, or Inverse, then enter the degrees of freedom. To Generate Confidence Intervals ZINTERVAL K σ =K C C generates a confidence interval for µ using the normal distribution with confidence level K%.. You must enter a value for σ, either actual or estimated. A separate interval is given for data in each column. If K is not specified, a 95% confidence interval will be given. WINDOWS menu selection: Stat Basic Statistics 1-sample z In the dialog box click [Options] and enter the confidence level. TINTERVAL K C C generates a confidence interval for µ using Student s t distribution with confidence level K%. A separate interval is given for data in each column. If K is not specified, a 95% confidence interval is given. WINDOWS menu selection: Stat Basic Statistics 1-sample t In the dialog box click [Options] and enter the confidence level. PONE K K with subcommand Confidence K generates a confidence interval for one proportion. WINDOWS menu selection: Stat Basic Statistics 1 Proportion
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