STATISTICS AND DATA ANALYSIS FOR

ENGINEERS

WITH R

INNOCENT NDOH MBUE, PHD

( A S S O C . P R O F. I N E C O -
I N F O R M AT I C S )
1

17-Dec-24
 In the last class,

1. Simple random sampling without replacement

(SRSWOR):
 If n units are selected by SRSWOR, the total number of
possible samples are:

 So the probability of selecting any one of these samples

is:
.
 SRSWOR is a method of selection of n units out of the
N units one by one such that at any stage of selection,
any one of the remaining units have the same chance of
being selected, i.e. 1/N
17-Dec-24 2
2. Simple random sampling with replacement
(SRSWR):

SRSWR is a method of selection of n units out of the N

units one by one such that at each stage of selection, each
unit has an equal chance of being selected, i.e., 1/N

 When n units are selected with SRSWR, the total

number of possible samples are:
Nn

 The Probability of drawing a sample is:

1/Nn
17-Dec-24 3
 LECTURE IV
POINT AND INTERVAL
ESTIMATION
4

17-Dec-24
 Objectives
5
In this chapter, you will:
 Define a point estimate.
 Define level of confidence
 Construct and interpret confidence interval estimates
for the population mean and the population
proportion
 Determine the sample size necessary to develop a
confidence interval for the population mean or
population proportion

Monday, March 13,

 Chapter Outline
6

Content of this chapter

• Confidence Intervals for the Population Mean, μ

– when Population Standard Deviation σ is Known

– when Population Standard Deviation σ is Unknown

• Confidence Intervals for the Population Proportion, π

• Determining the Required Sample Size

Monday, March 13, 2023

17-Dec-24 6
 Point and Interval Estimates
 A point estimate is a single value (point) derived from a
sample and used to estimate a7 population value,

 A confidence interval estimate is a range of values

constructed from sample data so that the population parameter
is likely to occur within that range at a specified probability.
The specified probability is called the level of confidence.

Lower Upper
Confidence Confidence
Point Estimate Limit
Limit
Width of
confidence interval
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 POINT ESTIMATES
8

We can estimate a with a Sample

Population Parameter … Statistic
(a Point Estimate)

Mean μ X
Proportion π p

17-Dec-24 Monday, March 13, 2023 8

 CONFIDENCE INTERVALS
9

• How much uncertainty is associated with a point estimate of a

population parameter?

• An interval estimate provides more information about a

population characteristic than does a point estimate

• Such interval estimates are called confidence intervals

17-Dec-24 Monday, March 13, 2023 9

 GENERAL FORMULA
10

• The general formula for all confidence intervals

is:

Point Estimate ± (Critical Value)(Standard Error)

Where:
• Point Estimate is the sample statistic estimating the population
parameter of interest

• Critical Value is a table value based on the sampling distribution of

the point estimate and the desired confidence level

• Standard Error is the standard deviation of the point estimate

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 CONFIDENCE LEVEL
11

• Confidence the interval will contain the

unknown population parameter
• A percentage (less than 100%)

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 Confidence level, (1-)
(continued)
12

• Suppose confidence level = 95%

• Also written (1 - ) = 0.95, (so  = 0.05)
• A relative frequency interpretation:
• 95% of all the confidence intervals that can be
constructed will contain the unknown true parameter
• A specific interval either will contain or will not
contain the true parameter
• No probability involved in a specific interval

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 CONFIDENCE INTERVALS
13

Confidence
Intervals

Population Population
Mean Proportion

σ Known σ Unknown

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 Confidence interval for μ
(σ known)
14

σ
X  Z α/2
n

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 Finding the critical value, zα/2
15

• Consider a 95% confidence interval: Zα/2  1.96

1  α  0.95 so α  0.05

α α
 0.025  0.025
2 2

Z units: Zα/2 = -1.96 0 Zα/2 = 1.96

Lower Upper
X units: Confidence Point Estimate Confidence
Limit Limit
17-Dec-24 Monday, March 13, 2023 15
 COMMON LEVELS OF CONFIDENCE
16

• Commonly used confidence levels are 90%, 95%, and

99%

Confidence
Confidence
Coefficient, Zα/2 value
Level
1 
80% 0.80 1.28
90% 0.90 1.645
95% 0.95 1.96
98% 0.98 2.33
99% 0.99 2.58
99.8% 0.998 3.08
99.9% 0.999 3.27
17-Dec-24 Monday, March 13, 2023 16
 Intervals and level of confidence

17
Sampling Distribution of the Mean

/2 1– /2

x
Intervals μx  μ
extend from x1
σ x2 (1-)100%
X  Zα / 2 of intervals
n
to constructed
σ contain μ;
X  Zα / 2
n ()100% do not.
Confidence Intervals
17-Dec-24 Monday, March 13, 2023 17
EXAMPLE
18

• A sample of 11 circuits from a large normal population has a

mean resistance of 2.20 ohms. We know from past testing that
the population standard deviation is 0.35 ohms.

• Determine a 95% confidence interval for the true mean

resistance of the population.

17-Dec-24 18
 EXAMPLE
(continued)
19

• A sample of 11 circuits from a large normal population has a

mean resistance of 2.20 ohms. We know from past testing
that the population standard deviation is 0.35 ohms.
• Solution:

σ
X  Zα/2
n
 2.20  1.96 (0.35/ 11)
 2.20  0.2068
1.9932  μ  2.4068

17-Dec-24 Monday, March 13, 2023 19

INTERPRETATION
20

• We are 95% confident that the true mean

resistance is between 1.9932 and 2.4068 ohms
• Although the true mean may or may not be in
this interval, 95% of intervals formed in this
manner will contain the true mean

17-Dec-24 20
Monday, March 13, 2023
 Factors Affecting Confidence Interval Estimates

The factors that determine the width of a confidence interval are:

1. The sample size, n
2. The variability in the population, usually σ estimated by s
3. The desired level of confidence.

Example

A Management Association wishes to have information on the mean income of

middle managers in the retail industry. A random sample of 256 managers reveals
a sample mean of FCFA45,420. The standard deviation of this population is
FCFA2,050. The association would like answers to the following questions:
1. What is the population mean?
2. What is a reasonable range of values for the population mean?
3. What do these results mean?
Use 95 percent level of confidence

17-Dec-24 21 Monday, March 13, 2023 21

 Solution

1. In this case, we do not know. We do know the sample mean is FCFA45,420.

Hence, our best estimate of the unknown population value is the
corresponding sample statistic. The sample mean of FCFA45,420 is a point
estimate of the unknown population mean.

2. Verify that the confidence limit are FCFA45,169 and FCFA45,671

3. What do these results mean, i.e. what is the interpretation of the confidence
limits 45,169 and 45,671?
Ans:
If we select many samples of 256 managers, and for each sample we compute the
mean and then construct a 95 percent confidence interval, we could expect about
95 percent of these confidence intervals to contain the population mean.
Conversely, about 5 percent of the intervals would not contain the population
mean annual income, µ

17-Dec-24 22 Monday, March 13, 2023 22

 CONFIDENCE INTERVALS
23

Confidence
Intervals

Population Population
Mean Proportion

σ Known σ Unknown

17-Dec-24 Monday, March 13, 2023 23

 … Confidence interval for μ
(σ unknown)
24

• If the population standard deviation σ is unknown, we can

substitute the sample standard deviation, S
• This introduces extra uncertainty, since S is variable from
sample to sample
• So we use the t distribution instead of the normal distribution

17-Dec-24 Monday, March 13, 2023 24

 Confidence interval for μ
(σ unknown) (continued)
25
• Assumptions
• Population standard deviation is unknown
• Population is normally distributed
• If population is not normal, use large sample (n > 30)
• Use Student’s t Distribution
• Confidence Interval Estimate:
S
X  tα / 2
n
(where tα/2 is the critical value of the t distribution with n -1 degrees of
freedom and an area of α/2 in each tail)

17-Dec-24 Monday, March 13, 2023 25

 Student’s t distribution
26

• The t is a family of distributions

• The tα/2 value depends on degrees of freedom
(d.f.)
• Number of observations that are free to vary after sample mean
has been calculated

d.f. = n - 1

17-Dec-24 Monday, March 13, 2023 26

 Degrees of freedom (df)
27

Idea: Number of observations that are free to vary

after sample mean has been calculated
Example: Suppose the mean of 3 numbers is 8.0

Let X1 = 7
Let X2 = 8 If the mean of these three
What is X3? values is 8.0,
then X3 must be 9
(i.e., X3 is not free to vary)
Here, n = 3, so degrees of freedom = n – 1 = 3 – 1 = 2
(2 values can be any numbers, but the third is not free to vary
for a given mean)
17-Dec-24 Monday, March 13, 2023 27
 STUDENT’S T DISTRIBUTION
28

Note: t Z as n increases

Standard
Normal
(t with df = ∞)

t (df = 13)
t-distributions are bell-
shaped and symmetric, but
have ‘fatter’ tails than the t (df = 5)
normal

0 t
17-Dec-24 Monday, March 13, 2023 28
 STUDENT’S T TABLE
29

Upper Tail Area

Let: n = 3
df .10 .05 .025 df = n - 1 = 2
 = 0.10
1 3.078 6.314 12.706 /2 = 0.05

2 1.886 2.920 4.303

3 1.638 2.353 3.182 /2 = 0.05

The body of the table

contains t values, not 0 2.920 t
probabilities
17-Dec-24 Monday, March 13, 2023 29
 SELECTED T DISTRIBUTION VALUES
30

With comparison to the Z value

Confidence t t t Z
Level (10 d.f.) (20 d.f.) (30 d.f.) (∞ d.f.)

0.80 1.372 1.325 1.310 1.28

0.90 1.812 1.725 1.697 1.645
0.95 2.228 2.086 2.042 1.96
0.99 3.169 2.845 2.750 2.58

Note: t Z as n increases
17-Dec-24 Monday, March 13, 2023 30
 EXAMPLE OF T DISTRIBUTION
CONFIDENCE INTERVAL 31

A random sample of n = 25 has X = 50 and

S = 8. Form a 95% confidence interval for μ

• d.f. = n – 1 = 24, so t
α/2  t 0.025  2.0639

The confidence interval is

S 8
X  t α/2  50  (2.0639)
n 25

46.698 ≤ μ ≤ 53.302

17-Dec-24 Monday, March 13, 2023 31

 Example of t distribution confidence interval
(continued)
32

• Interpreting this interval requires the assumption that

the population you are sampling from is
approximately a normal distribution (especially since
n is only 25).
• This condition can be checked by creating a:
• Normal probability plot or
• Boxplot

17-Dec-24 Monday, March 13, 2023 32

 CONFIDENCE INTERVALS
33

Confidence
Intervals

Population Population
Mean Proportion

σ Known σ Unknown

17-Dec-24 Monday, March 13, 2023 33

 Confidence intervals for the
population proportion, π
34

• An interval estimate for the population

proportion ( π ) can be calculated by
adding an allowance for uncertainty to
the sample proportion ( p )

17-Dec-24 Monday, March 13, 2023 34

 Confidence intervals for the
population proportion, π (continued)
35

• Recall that the distribution of the sample

proportion is approximately normal if the sample
size is large, with standard deviation

 (1  )
σp 
n
• We will estimate this with sample data:

p(1 p)
n
17-Dec-24 Monday, March 13, 2023 35
 Confidence interval endpoints
36

• Upper and lower confidence limits for the

population proportion are calculated with the
formula

p(1  p)
p  Z α/2
n
• where
• Zα/2 is the standard normal value for the level of confidence
desired
• p is the sample proportion
• n is the sample size
• Note: must have np > 5 and n(1-p) > 5

17-Dec-24 Monday, March 13, 2023 36

 EXAMPLE
37

• A random sample of 100 people shows

that 25 are left-handed.
• Form a 95% confidence interval for the
true proportion of left-handers

17-Dec-24 Monday, March 13, 2023 37

 EXAMPLE
(continued)
38

• A random sample of 100 people shows that 25 are

left-handed. Form a 95% confidence interval for the
true proportion of left-handers.

p  Z /2 p(1  p)/n
 25/100  1.96 0.25(0.75)/100
 0.25  1.96(0.0433)

 0.1651    0.3349

17-Dec-24 Monday, March 13, 2023 38

INTERPRETATION
39

• We are 95% confident that the true percentage of

left-handers in the population is between
16.51% and 33.49%.

• Although the interval from 0.1651 to 0.3349 may or

may not contain the true proportion, 95% of intervals
formed from samples of size 100 in this manner will
contain the true proportion.

17-Dec-24 Monday, March 13, 2023 39

 DETERMINING SAMPLE SIZE
40

Determining
Sample Size

For the For the

Mean Proportion

17-Dec-24 Monday, March 13, 2023 40

 SAMPLING ERROR
41

• The required sample size can be found to reach a

desired margin of error (e) with a specified level of
confidence (1 - )

• The margin of error is also called sampling error

• the amount of imprecision in the estimate of the population
parameter
• the amount added and subtracted to the point estimate to
form the confidence interval

17-Dec-24 Monday, March 13, 2023 41

 DETERMINING SAMPLE SIZE
42

Determining
Sample Size

For the
Mean Sampling error
(margin of error)

σ σ
X  Zα / 2 e  Zα / 2
n n

17-Dec-24 Monday, March 13, 2023 42

 DETERMINING SAMPLE SIZE
(continued)
43

Determining
Sample Size

For the
Mean

e  Zα / 2
σ Z / 2 2 2
Now solve
for n to get
n 2
n e
17-Dec-24 Monday, March 13, 2023 43
 DETERMINING SAMPLE SIZE
(continued)
44

• To determine the required sample size for the mean, you must
know:

• The desired level of confidence (1 - ), which determines the

critical value, Zα/2
• The acceptable sampling error, e
• The standard deviation, σ

17-Dec-24 Monday, March 13, 2023 44

 REQUIRED SAMPLE SIZE EXAMPLE
45

If  = 45, what sample size is needed to

estimate the mean within ± 5 with 90%
confidence?

Z σ2 2
(1.645) (45) 2 2
n 2
 2
 219.19
e 5

So the required sample size is n = 220

(Always round up)

17-Dec-24 Monday, March 13, 2023 45

 If σ is unknown
46

• If unknown, σ can be estimated when using the

required sample size formula
• Use a value for σ that is expected to be at least as
large as the true σ

• Select a pilot sample and estimate σ with the

sample standard deviation, S

17-Dec-24 Monday, March 13, 2023 46

 DETERMINING SAMPLE SIZE
(continued)
47

Determining
Sample Size

For the
Proportion

π(1 π ) Now solve Z2 /2 π (1  π )

eZ for n to get n 2
n e
17-Dec-24 Monday, March 13, 2023 47
Sample Size for Estimating a Population Proportion

Example 1
A study needs to estimate the proportion of cities that have private refuse
collectors. The investigator wants the margin of error to be within .10 of the
population proportion, the desired level of confidence is 90 percent, and no
estimate is available for the population proportion. What is the required sample
size?

17-Dec-24 48 Monday, March 13, 2023 48

 Solution

17-Dec-24 49 Monday, March 13, 2023 49

 EXAMPLE 2
50

How large a sample would be necessary

to estimate the true proportion of
defectives in a large population within
±3%, with 95% confidence?

(Assume a pilot sample yields p = 0.12)

17-Dec-24 Monday, March 13, 2023 50

 REQUIRED SAMPLE SIZE EXAMPLE
51 (continued)

Solution:
For 95% confidence, use Zα/2 = 1.96
e = 0.03
p = 0.12, so use this to estimate π

Z / 2π (1  π ) (1.96) (0.12)(1 0.12)

2 2
n 2
 2
 450.74
e (0.03)
So use n = 451
17-Dec-24 Monday, March 13, 2023 51
 … Selecting an Appropriate Sample Size

There are 3 factors that determine the size of a sample, none of

which has any direct relationship to the size of the population.

 The level of confidence desired.

 The margin of error the researcher will tolerate.
 The variation in the population being Studied.

17-Dec-24 52 Monday, March 13, 52

 Finite-Population Correction Factor

A population that has a fixed upper bound is said to be finite.

For a finite population, where the total number of objects is N and the size of the
sample is n, the following adjustment is made to the standard errors of the
sample means and the proportion:

However, if n/N < .05, the finite-population correction factor may be ignored.

17-Dec-24 53 Monday, March 13, 2023 53

Confidence Interval Formulas for Estimating Means and Proportions with
Finite Population Correction

17-Dec-24 54 Monday, March 13, 2023 54

 CI for Mean with FPC - Example

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17-Dec-24 56 Monday, March 13, 2023 56
 ETHICAL ISSUES
57

• A confidence interval estimate (reflecting sampling error) should

always be included when reporting a point estimate
• The level of confidence should always be reported
• The sample size should be reported
• An interpretation of the confidence interval estimate should also
be provided

17-Dec-24 Monday, March 13, 2023 57

 CHAPTER SUMMARY
58

In this chapter we discussed:

• The construction and interpretation of confidence interval estimates for the
population mean and the population proportion
• The determination of the sample size necessary to develop a confidence
interval for the population mean or population proportion

17-Dec-24 Monday, March 13, 2023 58

 Homework

You want to rent an unfurnished one-bedroom apartment in Durham, NC next

year. The mean monthly rent for a random sample of 60 apartments advertised on
Craig’s List (a website that lists apartments for rent) is $1000. Assume a
population standard deviation of $200. Construct a 95% confidence interval.

a) To what population of apartments can you appropriately infer from your

sample in #1?

b) How large a sample of one-bedroom apartments above would be needed to

estimate the population mean within plus or minus $50 with 90% confidence?

c) True or False: With all else constant, an increase in population standard

deviation will shorten the length of a confidence interval

17-Dec-24 59 Monday, March 13, 2023 59