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DESCRIPTIVE STATISTICS
INFERENTIAL STATISTICS
Definition
Descriptive Statistics consists of
methods for organizing, displaying, and
describing data by using tables, graphs,
and summary measures.
Case Study: How Much Did Companies Spend
on Ads in 2011?
Case Study: How Women Rate Their Lives
Definition
Inferential Statistics consists of
methods that use sample results to
help make decisions or predictions
about a population.
Data can be used in different ways and the two main areas
are
x Margin of Error
Interval Estimate of a Population Mean:
s Known
In order to develop an interval estimate of a
population mean, the margin of error must be
computed using either:
• the population standard deviation s , or
• the sample standard deviation s
s is rarely known exactly, but often a good estimate
can be obtained based on historical data or other
information.
We refer to such cases as the s known case.
Confidence Levels:
• Confidence Level – The likelihood, expressed as a
percentage or a probability, that a specified interval
will contain the population parameter.
• 95% confidence level – there is a .95 probability that a
specified interval DOES contain the population mean.
In other words, there are 5 chances out of 100 (or 1
chance out of 20) that the interval DOES NOT contain
the population mean.
• 99% confidence level – there is 1 chance out of 100
that the interval DOES NOT contain the population
mean.
The confidence level = 𝟏 − 𝜶 𝟏𝟎𝟎%
where α = probability that the confidence
interval does not contain the true
population parameter.
Sampling
distribution
of x
x
z /2 s x z /2 s x
Interval Estimate of a
Population
• Interval Estimate of Mean:
s Known s
x z /2
n
Confidence Table
Level /2 Look-up Area z/2
90% .10 .05 .9500 1.645
95% .05 .025 .9750 1.960
99% .01 .005 .9950 2.576
Meaning of Confidence
Student’s t distribution
also normal distribution
approximates s
Student’s t Distribution
t distribution
(10 degrees
of freedom)
z, t
0
Characteristics of the t Distribution
The t distribution is similar to the standard
normal distribution in these ways:
1. It is bell-shaped.
2. It is symmetric about the mean.
3. The mean, median, and mode are equal
to 0 and are located at the center of the
distribution.
4. The curve never touches the x axis.
Characteristics of the t Distribution
ഥ−𝝁
𝒙
𝒕= 𝒔
𝒏
Where:
df = n – 1
ഥ = sample mean
𝒙
µ = population mean
s = standard deviation of the sample
n = sample size
Example Unit 4.2, page 27
𝒏 σ 𝑿𝟐 − σ 𝑿 𝟐
𝒔𝟐 =
𝒏 𝒏−𝟏
Visits to Networking Sites A sample of 10
networking sites for a specific month has a
mean of 26.1 and a standard deviation of 4.2.
Find the 99% confidence interval of the true
mean. Assume that the variable is
approximately normally distributed
Thunderstorm Speeds Ameteorologist who
sampled 13 thunderstorms found that the
average speed at which they traveled across
a certain state was 15 miles per hour. The
standard deviation of the sample was 1.7
miles per hour. Find the 99% confidence
interval of the mean. If a meteorologist
wanted to use the highest speed to predict
the times it would take storms to travel
across the state in order to issue warnings,
what figure would she
likely use?
Confidence Intervals and Sample Size
for Proportions
ෝ−𝒑
𝒑
𝒛=
𝒑𝒒
𝒏
Where:
ෝ = sample proportion
𝒑
p = population proportion
n = sample size
q=1–p
Example
If 15% of the batteries produced daily by a
company is defective, what is the
probability of randomly selecting 70
batteries and finding 14 or more of them
defective?
Formula for a Specific Confidence Interval
for a Proportion