Statistics for Business
and Economics
Anderson Sweeney Williams
Slides by
John Loucks
St. Edward’s University
Chapter 8
Interval Estimation
Population Mean:
s
Known
Population Mean:
s
Unknown
Determining the Sample Size
Population Proportion
A point estimator cannot be expected to provide the
exact value of the population parameter.
An interval estimate can be computed by adding and
subtracting a margin of error to the point estimate.
Point Estimate +/– Margin of Error
The purpose of an interval estimate is to provide
information about how close the point estimate is to
the value of the parameter.
Margin of Error and the Interval Estimate
The general form of an interval estimate of a
population mean is
Margin of Errorx
Margin of Error and the Interval Estimate
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.
