UNDERSTANDING
CONFIDENCE INTERVAL
ESTIMATES
FOR THE POPULATION
MEAN
Martin Bryan M. Reyes
DEFINITIONS
• POINT ESTIMATE: A point estimate is a
specific numerical value of a population
parameter. The sample mean X is the best
point estimate of a population mean.
• INTERVAL ESTIMATE: Also called a
confidence interval, is a range of values
used to estimate a parameter. This
estimate may or may not contain the true
parameter value.
DEFINITION
• Confidence Level (CL) is a statistical
measure of the percentage of test results
that can be expected to be within a
specified range. For example, a
Confidence Level of 95% means that the
result of an action will probably meet
expectations 95% of the time.
• The area under a normal
distribution curve represents
probabilities and is expressed as a
percentage or proportion.
Approximately 68% of the area
falls within one standard deviation
of the mean, which is between z =
-1 and z = 1. For a 95%
confidence interval, the area is
divided into two tails, with 2.5% in
each tail beyond z = ±1.96.
Similarly, for a 99% confidence
interval, the critical z-values are
±2.58, with 0.15% in each tail
beyond these values. These z-
values, also known as critical
values or confidence coefficients,
are used to determine the
boundaries of confidence
intervals. The standard normal
variable z is the test statistic used
in these calculations.
RECALL
• The Central Limit Theorem (CLT) states that as the sample size
increases, the distribution of the sample means will approximate a
normal distribution, regardless of the shape of the population
distribution. For large sample sizes, approximately 95% of the sample
means will fall within 1.96 standard errors of the population mean.
This means that if you take many samples from a population with
mean μ and standard deviation σ, and calculate the sample mean for
each sample, about 95% of these sample means will lie within 1.96
standard deviations of the true population mean.
Rounding Rule for a Confidence
Interval for a Mean
• In computing a confidence interval for a
population mean by using raw data, round off to
one more decimal place than the number of
decimal places in the original data.
• In computing a confidence interval for a
population mean by using a sample mean and a
standard deviation, round off to the same
number of decimal places as given for the mean.
DETERMINING INTERVAL
ESTIMATES
• In the general formula for a confidence
interval, the term (write on the board) is
called margin of error, denoted by E, which
is defined as the maximum likely
difference between the observed sample
mean and the true value of the population
mean p. Thus, another way of writing the
formula for finding the confidence interval
for the population parameter p is:
IF SD IS NOT KNOW
• However, when o is not known (as is often
the case), the sample standard deviations
is used to approximate o. So, the formula
for E is modified.(draw the formula on the
board)
SOLVING
The average test scores in a physics class is
normally distributed with a standard
deviation of 5.4. 50 scores with a sample
mean of 79 were selected at random.
(a) Find a 95% confidence interval for the
population mean test score.
(b) What is the value of the margin of error?
