Sample size and estimation (confidence interval)
Methods of Probability Sampling
◼ In nonprobability sample inclusion in the sample is based on the judgment of the
person selecting the sample.
◼ The sampling error is the difference between a sample statistic and its corresponding
population parameter.
Sampling Error
By definition, sampling is used to calculate sample statistics which are estimates
of population parameters. So there will always be a difference (usually an
unknown difference) between the sample statistic and the population
parameter. This difference is called sampling error.
How large sample select? What sample size
• If you have stander division so 𝒗𝒂𝒓𝒊𝒂𝒏𝒄𝒆 = 𝝈𝟐 = stander division square (Aims
estimate mean)
• If you have not stander division but you have proportion = P so 𝒗𝒂𝒓𝒊𝒂𝒏𝒄𝒆 = P(1-P)
(Aims estimate proportion)
◼ Hint: If you haven’t proportion put Aims estimate proportion Assume p=0.5
z= 1.64(confidence level 90%), 1.96 (95%), 2.58 (99%)
E= the margin of error = after within … of population mean (or proportion)
example:
A marketing researcher wants to find a 95% confidence interval for the mean amount that
visitors to a theme park spend per person per day. She knows that the standard deviation of
the amounts spent per person per day by all visitors to this park is $11. How large a sample
should the researcher select so that the estimate will be within $2 of the population mean?
Solution :
Required How large a sample should the researcher select
Given : 95% confidence interval Z = 1.96
the standard deviation = 11 σ2 = 121
estimate will be within $2 E=2
𝒛𝟐 . 𝒗𝒂𝒓𝒊𝒂𝒏𝒄𝒆 𝟏.𝟗𝟔𝟐×𝟏𝟐𝟏
𝒏= = = 116.21 ≈ 𝟏𝟏𝟕
𝑬𝟐 𝟐𝟐
Example:
A consumer agency wants to estimate the proportion of all drivers who wear seat belts while
driving. Assume that a preliminary study has shown that 76% of driver's wear seat belts while
driving. How large should the sample size be so that the 99% confidence interval for the
population proportion has a margin of error of .03?
Solution :
Required How large should the sample size
Given : 99% confidence interval Z = 2.58
variance = P(1-P) (Aims estimate proportion)
= 0.76×0.24=0.1824
margin of error of .03 E = 0.03
𝒛𝟐 . 𝒗𝒂𝒓𝒊𝒂𝒏𝒄𝒆 𝟐.𝟓𝟖𝟐×𝟎.𝟏𝟖𝟐𝟒
𝒏= = = 1349.03 ≈ 𝟏𝟑𝟓𝟎
𝑬𝟐 𝟎.𝟎𝟑𝟐
Point Estimates
◼ A point estimate is a single value (point) derived from a sample
and used to estimate a population value.
Confidence Interval Estimates
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.
C.I = point estimate ± margin of error
Factors Affecting Confidence Interval Estimates
The width of a confidence interval is determined by:
▪ The sample size, n
▪ The variability in the population, usually σ estimated by s
▪ The desired level of confidence
Confidence Intervals for a Mean
𝝈
Confidence Intervals for a population Mean 𝒙±𝒛
√𝒏
▪ The width of the interval is determined by the level of confidence and the size of the
standard error of the mean.
𝝈
▪ The standard error ( )is affected by two values:
√𝒏
➢ Standard deviation
➢ Number of observations in the sample
𝝈
▪ The margin of error =(𝒛 )
√𝒏
Example:
The American Management Association surveys middle managers in the retail industry and
wants to estimate their mean annual income. A random sample of 49 managers reveals a
sample mean of $45,420. The standard deviation of this population is $2,050.
▪ What is the best point estimate of the population mean?
▪ What is a reasonable range of values for the population mean?
▪ What do these results mean?
Solution:
▪ What is the best point estimate of the population mean?
Our best estimate of the unknown population mean is the corresponding sample statistic.
The sample mean of $45,420 is the point estimate of the unknown population mean.
▪ What is a reasonable range of values for the population mean?
Suppose the association decides to use the 95 percent level of confidence. The 95 percent
confidence interval estimate is:
𝝈 𝟐𝟎𝟓𝟎
𝒙±𝒛 45420 ±𝟏. 𝟗𝟔
√𝒏 √𝟒𝟗
45420 ± 574 45420-574 = 44846 ; 45420 + 574 = 45994
▪ What do these results mean?
we could expect about 95 percent of these confidence intervals to contain the population
mean.
A Confidence Interval for a Population Proportion, p
𝒙
Sample proportion 𝒑=
𝒏
𝒑(𝟏−𝒑)
Confidence Interval for a Population Proportion 𝒑 ± 𝒛√
𝒏
𝒑(𝟏−𝑷) 𝒑(𝟏−𝑷)
▪ The standard error = (√ ) The margin of error =(𝒛√ )
𝒏 𝒏
Example
The union representing the Bottle Blowers of America (BBA) is considering a proposal to
merge with the Teamsters Union. According to BBA union bylaws, at least three-fourths of
the union membership must approve any merger. A random sample of 2,000 current BBA
members reveals 1,600 plan to vote for the merger proposal. What is the estimate of the
population proportion?
Develop a 95 percent confidence interval for the population proportion. Basing your
decision on this sample information, can you conclude that the necessary proportion of BBA
members favor the merger?
solution
𝒙 𝟏𝟔𝟎𝟎
First, compute the sample proportion: 𝒑 = = = 𝟎. 𝟖𝟎
𝒏 𝟐𝟎𝟎𝟎
compute the 95% confidence interval
𝒑(𝟏−𝒑) 𝟎.𝟖𝟎(𝟏−𝟎.𝟖𝟎)
𝒑 ± 𝒛√ 𝟎. 𝟖𝟎 ± 𝟏. 𝟗𝟔√
𝒏 𝟐𝟎𝟎𝟎
=0.80 ±𝟎. 𝟎𝟏𝟖 0.80-.018 = 0.782 ; 0.80+0.018 = 0.818
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.
Standard Error of the Mean Standard Error of the Proportion
𝜎 𝑁−𝑛 𝑝(1−𝑝) 𝑁−𝑛
𝜎𝑥 = √ 𝜎𝑝 = √ √
√𝑛 𝑁−1 𝑛 𝑁−1
Confidence Interval for the Difference Between
Two Population Means Two Population Proportions
