E370

10/25/2014
Inferential Methods:
Confidence Interval
Estimation
Week 10 Pt 2
 The Cherry Farmer's Co-op on the peninsula in
Grand Traverse Bay in Michigan is responsible for
packing and shipping the annual cherry harvest.
The co-op coordinator needs to know the average
diameter of the cherries at harvest so that
appropriate packing boxes can be ready for the
different cherry varieties. A random sample of 100
Bing cherries was drawn and measured. The mean
of the sample was 1.2 inches. The standard
deviation of Bing cherries is believed to be 0.1
inches. Calculate a 99% confidence interval for the
population mean diameter of Bing cherries.

An application
 What we know:
n=100 = . = .
What we want: An estimate of mean Bing cherry
diameter at a level of confidence of 99%.
Point Estimate
1.2 inches
Margin of error, e

=

=NORM.S.INV(0.995)= 2.576
.
= = . = . . = .

Calculations
 We have 99% confidence that the mean
diameter of Bing cherries is between 1.17 and
1.23 inches.
State the level of confidence.
Specify the parameter you are estimating.
State the interval.
You should always know the sample size that was
used in the estimate.

Required Components for

an interpretation
 In Denver, Colorado, there was a proposal to establish
an Extraterrestrial Affairs Commission to track space
aliens. "We hope to get the message out that
technology from extraterrestrial origins has been
withheld, and that it can cure cancer," says Jeff
Peckman, the director of the ballot initiative. Mr.
Peckman paid for his own polling. He questioned a
random sample of 199 of the 3974 signatures he
obtained to get the initiative on the ballot. Of those
questioned, 102 were in favor of the initiative.
Calculate a 90% confidence interval for the proportion
of Denver residents in favor of this proposal.

Extraterrestrial Affairs in Denver

 What we know:
n=199 =
What we want: An estimate of the proportion of Denver residents
in favor of establishing an Extraterrestrial Affairs Commission at a
level of confidence of 90%.
Alpha?
= 0.10
Point Estimate

= = = .
The Random Variable?
. .
~ . ,
= .
Margin of error, e
()
=

What we know

=NORM.S.INV(0.95)= 1.645
= = . . = .

The 90% confidence interval:

0.5126 0.0582
OR
[0.4544, 0.5708]

Calculations
 Mr.Peckman is 90% confident that the
proportion of all Denver residents in favor of
the establishment of an Extraterrestrial Affairs
Commission is 51% plus or minus 6%.

OR

Mr.Peckman is 90% confident that the

proportion of all Denver residents in favor of
the establishment of an Extraterrestrial Affairs
Commission is between 45% and 57%.

Interpret this interval.

 Take a look at this set of 100 90% confidence
intervals, calculated assuming that the true
proportion of support for Mr. Peckams
proposal is 51%.
What do you think it means to be 90%
confident?
Lets take a look at the picture.

What does it mean to be

confident?
 Mr. Peckmans prognostication was unsound.
The actual proportion of Denver residents in
favor of his initiative was 15%.
Lets calculate a 90% confidence interval using
the actual percentage and compare the two
intervals.
The center of the interval changes and so does the
standard error of the proportion.
..
~(. , = . )

Unfortunately,
 Dr. Gupta of CNN's "Paging Dr. Gupta" reported that a poll
of 49 American adults reported 48% exceeding the
recommended dose of over-the-counter (non-prescription)
drugs. Calculate a 95% confidence interval for the
proportion of American adults who exceed the
recommended dose of over-the-counter (non-prescription)
drugs.
What is the random variable?

. .
~ . , = .

What is e?
= . . = . . .
Or [. , . ]

Another application