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156 Chapter 9: Estimating the Value of a Parameter

Chapter 9 Estimating the Value of a Parameter

9.1 Estimating a Population Proportion

Objectives

1. Obtain a point estimate for the population proportion

2. Construct and interpret a confidence interval for the population proportion
3. Determine the sample size necessary for estimating a population proportion
within a specified margin of error

1 Obtain a Point Estimate for the Population Proportion

A point estimate is the value of a statistic that estimates the value of a parameter.

For example, the point estimate for the population proportion is 𝑝̂ = , where x represents the
number of individuals with the specific characteristic and n is sample size.

EXAMPLE: Obtaining a Point Estimate of a Population Proportion

In a survey of 2019 adult Americans aged 18 years or older, 1252 stated that they frequently
worry about their financial situation.
(a)Determine the number of observations, n, and number of successes, x.

n
(b)Find the sample proportion of adult Americans aged 18 years or older who frequently
worry about their financial situation. Note: Round proportions to three decimal places.

p LIF O620
2 Construct and Interpret a Confidence Interval for the Population
Proportion

A confidence interval for an unknown parameter consists of an interval of numbers based on a

point estimate.
The level of confidence represents the expected proportion of intervals that will contain the
parameter if a large number of different samples is obtained. The level of confidence is denoted
(1 − 𝛼) ∙ 100% .

Some unanswered questions:

1. Why does the level of confidence represent the expected proportion of intervals that
contain the parameter if a large number of different samples is obtained?
2. How is the margin of error determined?

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 Section 9.1: Estimating a Population Proportion 157

To help answer these questions, it helps to review of the sampling distribution of the sample
proportion, 𝑝̂ from Section 8.2:

For a simple random sample of size n with a population proportion p, we know:

⦁The shape of the distribution of all sample proportions is approximately normal
provided 𝑛𝑝(1 − 𝑝) ≥ 10, the sample size is no more than 5% of the population size,
and the data are obtained randomly.
⦁The mean of the distribution of the sample proportion equals the population proportion.
That is, 𝜇 = 𝑝 .
⦁The standard deviation of the distribution of the sample proportion (the standard error)
( )
is 𝜎 = .

Let’s start by considering a 95% confidence interval.

95% of all sample proportions are in the following inequality: standarderror

m
1.96Op t
p 1.96g f L
p
Egg 7.05 70.025
Rewrite the inequality with the population proportion, p, in the middle: 2

f 1.96
of
L
p
c
f t 1.96Op
So, 95% of all sample proportions will result in confidence interval estimates that contain the
population proportion, whereas 5% of all sample proportions (those in the tails of the distribution
above), will result in confidence interval estimates that do not contain the population proportion.

Write the 95% confidence interval in the form point estimate ± margin of error:
estimate marginof error
point
t 1.96mg
population
forproportion p p
The margin of error for a 95% confidence interval for the population proportion is 1.96𝜎 . This
determines the width of the interval.

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Copyright © 2021 Pearson Education, Inc.
158 Chapter 9: Estimating the Value of a Parameter

ACTIVITY: Illustrating the Meaning of Level of Confidence

Go to StatCrunch and select Applets > Confidence intervals > for a proportion. Check the
“Proportion with characteristic” radio button and set p to 0.3. Click Compute! Or go to
www.pearsonhigher.com/sullivanstats and select the “Confidence Intervals for a Proportion with
p = 0.3” applet. Change the sample size to 150 (this is to ensure the sampling distribution of the
sample proportion is approximately normal).

(a) Click “100 intervals” two times to generate confidence intervals for 200 independent
simple random samples of size n = 150 from a population with p = 0.3. What
proportion of the 200 intervals include the population proportion?

(b) What causes an interval to not include the population proportion?

Whether a confidence interval contains the population parameter depends solely on the value of
the sample statistic. Any sample statistic that is in the tails of the sampling distribution will result
in a confidence interval that does not include the population parameter.

Sullivan, Statistics: Informed Decisions Using Data, 6/e

Copyright © 2021 Pearson Education, Inc.
 Section 9.1: Estimating a Population Proportion 159

CAUTION
A 95% confidence interval does not mean that there is a 95% probability that the interval contains
the parameter (such as p or µ). Remember, probability describes the likelihood of undetermined
events. Therefore, it does not make sense to talk about the probability that the interval contains
the parameter since the parameter is a fixed value. Think of it this way: I flip a coin and obtain a
head. If I ask you to determine the probability that the flip resulted in a head, it would not be 0.5,
because the outcome has already been determined. Instead, the probability is 0 or 1. Confidence
intervals work the same way. Because p or µ is already determined, we do not say that there is
95% probability that the interval contains p or µ.

( )
We need a method for constructing any 1− α ⋅100% confidence interval. I 0.057100
0.05 957100
95

Note
0.025
2.5
Q
20.025
20.025
Based on the figure, the 95% confidence interval given earlier may be generalized as follows:

The value 𝑧 / is called the critical value.

𝜶
Level of Confidence, (1 – α)∙100% Area in Each Tail, Critical Value, 𝒛𝜶
𝟐 𝟐

90% 0.05 1.645

95% 0.025 1.96
99% 0.005 2.575

Interpretation of a Confidence Interval

A (1 – α)∙100% confidence interval indicates that (1 – α)∙100% of all simple random samples of
size n from the population whose parameter is unknown will result in an interval that contains the
parameter.

Sullivan, Statistics: Informed Decisions Using Data, 6/e

Copyright © 2021 Pearson Education, Inc.
 terror
ft Mangino
160 Chapter 9: Estimating the Value of a Parameter 0.6410.015
o 625
0.655
f 0.64
EXAMPLE: Interpreting a Confidence Interval Margingotearor0.015

Based on a Pew Research poll, the proportion of parents who say children should be financially
independent from their parents by age 22 or younger is 0.64. The survey was conducted on 9834
parents and the margin of error was reported at 0.015 with a 95% level of confidence. Determine
and interpret the confidence interval for the proportion of parents who believe children should be
financially independent from their parents by the age of 22 or younger.
who believe children
We are 95 confidentthat the proportion of parents the age of 22
shouldbe financially independent from their parents by
or younger is between
0.625 and 0.655
Constructing a (1 – α)∙100% Confidence Interval for a Population Proportion
Suppose that a simple random sample of size n is taken from a population or the data are the
result of a randomized experiment. A (1 – α)∙100% confidence interval for p is given by the
following quantities:
( ) ( )
Lower bound: 𝑝̂ − 𝑧 ∙ Upper bound: 𝑝̂ + 𝑧 ∙
Note: It must be the case that 𝑛𝑝̂ (1 − 𝑝̂ ) ≥ 10 and 𝑛 ≤ 0.05𝑁 to construct this interval.

It is then shown that the margin of error, E, in a (1 – α)∙100% confidence interval for a
( )
population proportion is given by 𝐸 = 𝑧 ∙ .

EXAMPLE: Constructing a Confidence Interval for a Population Proportion

In a survey of 2019 adult Americans aged 18 years or older, 1252 stated that they frequently
worry about their financial situation.
(a) Obtain a 90% confidence interval for the proportion of adult Americans who
frequently worry about their financial situation. I f ZamOf
0.620 I i
64510.018023808
F In L2 f 0.620 0.620 I O 0296491642
Critical 2.05 10.590 0.650
valve Zaz Zig
O Ol 08 or O 01 1
6pm 2019
(b) Redo part (a) by increasing the level of confidence from 90% to 95%.

criticalValue Z 2 025 196

I 7025Gp
0.018023808
0.620 I 1.96
62010.0353266637
G
Sullivan, Statistics: Informed Decisions Using Data, 6/e
Copyright © 2021 Pearson Education, Inc.

0.585 0.655
 Section 9.1: Estimating a Population Proportion 161

95
(c) How does increasing the level of confidence affect the confidence interval? Why do
you suppose that is?
Him
I l l l 10.655
05850.590 0.650
f
(d) Suppose the number of individuals surveyed has increased four-fold to 8076, and the
number of successes also increased four-fold to 5008. The sample proportion remains
at 0.620. Compute the margin of error. Compare this margin of error to that when
the sample size is 2019.
0.62
I
E 6I 0.621 0.009
qq.PT Z420fp
8076 E 1.6451
o

0.611 0.629
C 20.009 0.030
i E 0.02964
from part a
Margin of error
(e) Compare the 90% confidence interval found in part (d) to the 90% confidence
interval found in part (a). What do you observe happening to the interval when the
sample increased? Why do you suppose that is?

confidenceinterval trompartca 0.599 0.650

90
Note n 2019
trompartld 0.6140.629
confidence interval
90
Note re 8076 Dyp
open 0.429

3 Determine the Sample Size Necessary for Estimating a Population

0.590 IT 0.650
Proportion within a Specified Margin of Error

( )
Solve 𝐸 = 𝑧 ∙ for n.

THA ra
f.pe
EI T
fiF
r zjyIFh

HTFh pT.fZHfj2 n

n pa pt.EEIY
fzfzfi.ph
Sullivan, Statistics: Informed Decisions Using Data, 6/e
Copyright © 2021 Pearson Education, Inc.
162 Chapter 9: Estimating the Value of a Parameter

Sample Size Needed for Estimating the Population Proportion p

The sample size required to obtain a (1 – α) ∙ 100% confidence interval for p with a margin of
/
error E is given by 𝑛 = 𝑝̂ (1 − 𝑝̂ ) rounded up to the next integer, where 𝑝̂ is a prior
estimate of p.

If a prior estimate of p is unavailable, we let 𝑝̂ = 0.50, and therefore the sample size required is
/
𝑛 = 0.25 rounded up to the next integer.

Note: The margin of error should always be expressed as a decimal when using sample size
formulas.

EXAMPLE: Determining Sample Size

A social worker wants to know the proportion of the U.S. population over age 16 who provide
eldercare – unpaid care for someone with a condition related to aging – to others. What size
sample should be obtained if the social worker wants an estimate within 3 percentage points of
the true proportion with 95% confidence if

(a) the social worker uses the 2015 estimate from the American Time Use Survey of 16%.

Naked 16
1 12 573.68 roundup to 574

(b) the social worker does not use any prior estimates?
to 1068
n 0.256
6
12 1067.11 roundup

9.2 Estimating a Population Mean

Objectives

1. Obtain a point estimate for the population mean

2. State properties of Student’s t-distribution
3. Determine t-values
4. Construct and interpret a confidence interval for a population mean
5. Determine the sample size neededset to estimate the population mean within a
specified margin of error

1 Obtain a Point Estimate for the Population Mean

The point estimate of the population mean, µ, is the sample mean, 𝑥̅ .

Sullivan, Statistics: Informed Decisions Using Data, 6/e

Copyright © 2021 Pearson Education, Inc.