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Estimation of Population Means:

Point Estimation and Confidence
Interval

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 Statistics

Descriptive Inferential

Estimation Hypothesis testing

Interval estimates
Point estimate
(CI)

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 Types of Estimators

Point Estimator
- It gives a single value as an estimate of the
parameter of interest
Interval Estimator
- It specifies a range of values of the parameter and our
confidence that the parameter value is in that range

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 Point Estimation
• A point estimate of the population parameter is the sample
statistic computed from a random sample drawn from the
population under study.
• Certain sample statistic are good point estimators for certain
parameters
-
 ----- Estimates ----- µ
Ѕ ----- Estimates ----- 
p ----- Estimates ----- p
• Sample mean is a statistic that varies from sample to sample
• If the investigator had repeated the experiment, he would
have found a range of sample means, any one of which
would be a point estimate of the population mean.
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 • A Point Estimate is a single number,
– How much uncertainty is associated with a point estimate of a population
parameter?
– The point estimate method fails to indicate how close the estimate
is to population parameter. This flaw can be remedied by use of a
confidence interval estimate (CI).
• An interval estimate provides more information about a
population characteristic than does a point estimate. It provides
a confidence level for the estimate. Such interval estimates are
called Confidence Intervals

Upper
Lower
Confidence Confidence
Point Estimate
Limit Limit
Width of
confidence interval
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 Interval Estimation

• It is the interval of numbers in which we

have a specified degree of assurance that
the value of the parameter can be found.
• The level of confidence tells the probability
the method produced an interval that
includes the unknown parameter
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 • An interval gives a range of values:
– Takes into consideration variation in sample statistics
from sample to sample
– Based on observations from 1 sample
– Gives information about closeness to unknown
population parameters
– Stated in terms of level of confidence. (Can never be
100% confident)
• The general formula for all confidence intervals is
equal to:
Point Estimate ± (Critical Value)(Standard Error)

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 Confidence interval for population
parameter(s)
• A confidence interval is a formula that tell us how to
use sample data to calculate an interval that estimate a
population parameter e.g. population mean (µ).
• The confidence coefficient is the probability that an
interval estimator encloses the population parameter
i.e.(1-α)
• The confidence level is the confidence coefficient
expressed as a percentage i.e.
(1- α)%

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 Empirical Rule Definition
For data sets having a normal bell-shaped
distribution, the following properties apply:
– About 68% of all values fall within 1 standard
deviation of the mean
– About 95% of all values fall within 2 standard
deviation of the mean
– About 99.7% of all values fall within 3 standard
deviation of the mean.

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 Confidence Interval

• Now using the Empirical Rule for the normal

distribution we know that the interval X + 2 σ/n , or
more precisely, the interval X + 1.96 σ/n includes 95%
of X’s in the repeated sampling.

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 Confidence Interval Estimation of
Population Mean, μ, when σ is known
• Assumptions
– Population standard deviation σ is known
– Population is normally distributed
– If population is not normal, use large sample

• Confidence interval estimate:

σ
x  X  Z
n
(where Z is the normal distribution’s critical value for a probability of
α/2 in each tail)
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 • Consider a 95% confidence interval:
1    .95   .05  / 2  .025

α .475 .475 α
 .025  .025
2 2

Z
Z= -1.96 0 Z= 1.96
Lower Upper
Confidence Point
Point Estimate
Estimate Confidence
Limit Limit

μ
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 Confidence Intervals
• Formula:
    
X  Z / 2  X  Z / 2 
n n
• Steps:
1. Calculate the sample statistic to use as an estimate of
the population parameter

2. Calculate the lower (LL) and the upper limits (UL) of

the confidence interval

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 Determination of σ
• In order to construct an interval estimate, it is necessary to
obtain some estimate of σ, the variability of the population
from which the sample is drawn.


• This is required to obtain an estimate of the standard error
x 
n
of the sample mean

• Generally, the sample standard deviation s is used as an

estimate of σ. For large sample size, assume the CLT holds
and assume s provides a reasonable estimate of σ.

• For a small sample, where n < 30, the t-distribution should

be used, again using s as an estimate of σ .

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 Level of Confidence

• Probability that the unknown population parameter is in

the confidence interval in 100 trials. Denoted (1 - α) % =
level of confidence e.g. 90%, 95%, 99%

• α Is Probability that the parameter is not within the

interval in 100 trials

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 Selecting a confidence level
• There is no one confidence level that is
appropriate for all circumstances.

• Greater confidence level means greater certainty

that the interval estimate of µ actually contains
µ. But for 99% or 99.9% confidence level, the
interval may be very wide.

• Smaller confidence levels (eg. 80% or 90%)

produce smaller margins of error and seemingly
more precise interval estimates, but they are less
likely to contain µ.

• By tradition, the default level is 95%.

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 Interpretation

• The interpretation of the confidence interval is very

important. Basically it means that upon taking a sample of
size ‘n’ repeatedly and constructing the interval
X + 1.96 σ/n each time, we would expect the population
mean  to fall within the interval 95% of the time .

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 Interpretation of a Confidence
Interval for Population Mean (µ)
• We can be 100(1-α)confident that µ lies between the lower
and upper bounds of the confidence interval.

• In other way, it means that upon taking a sample of size

‘n’ repeatedly and constructing the interval X + 1.96
σ/n each time, we would expect the population mean
 to fall within the interval 95% of the time

• The values are called lower and upper 100(1-α)%

confidence limits.

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 Commonly used values of Zα/2
Confidence level
100 (1-α) α α Zα
2 2
90% 0.10 0.05 1.645
95% 0.05 0.025 1.96
99% 0.01 0.005 2.575

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 Example 1
• If we wish to estimate the mean VO2 uptake for a
population of joggers based on a random sample of 100
joggers, we could use the 95% confidence interval for .
From our random sample of 30 joggers we know that X =
47.5 ml/kg and S = 4.8 ml/kg. A 95% Confidence Interval
(C.I.) of  is
X + 1.96 S /n or 47.5 + 1.96 ( 4.8)/5.477
47.5 + 1.718 or ( 45.78, 49.22)
• The values 45.78 and 49.22 are the lower and upper 95%
confidence limits.
• Interpretation: We are 95% confident that in the long run
the intervals constructed in such a way will contain the
population mean .
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 Example 2
• If we wish to estimate the mean VO2 uptake for a
population of joggers based on a random sample of 100
joggers, we could use the 95% confidence interval for .
From our random sample of 100 joggers we know that X =
47.5 ml/kg and S = 4.8 ml/kg. A 95% Confidence Interval
(C.I.) of  is
X + 1.96 S /n or 47.5 + 1.96 ( 4.8)/10
47.5 + 0.94 or ( 46.56, 48.44)
• The values 46.56 and 48.44 are the lower and upper 95%
confidence limits.
• Interpretation: We are 95% confident that in the long run
the intervals constructed in such a way will contain the
population mean .
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 Example 3
• If we wish to estimate the mean VO2 uptake for a
population of joggers based on a random sample of 100
joggers, we could use the 99% confidence interval for .
From our random sample of 100 joggers we know that X =
47.5 ml/kg and S = 4.8 ml/kg. A 99% Confidence Interval
(C.I.) of  is
X + 2.575 S /n or 47.5 + 2.575 ( 4.8)/10
47.5 + 1.24 or ( 46.26, 48.74)
• The values 46.26 and 48.74 are the lower and upper 99%
confidence limits.
• Interpretation: We are 99% confident that in the long run
the intervals constructed in such a way will contain the
population mean .
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 Width of a Confidence Interval

• The width of any confidence interval is the difference

between the upper confidence limit and the lower
confidence limit .
• The width of a confidence interval represent the
accuracy of estimation .

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 Factors Affecting Interval Width
Narrow widths and high confidence levels are desirable,
but these two things affect each other
• Data Variation
Intervals Extend from
measured by σ
• Sample Size n X  Z X to X  Z X
• Level of Confidence
(1 - α)
• Confidence Interval Estimate
 
X  Z / 2    X  Z / 2 
n n
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Why Narrow Confidence Interval are
Important ?
• Narrow confidence intervals are of the greatest value in
making estimates ,because they allow us to estimate an
unknown parameter with little room for error .
• A confidence interval can be narrowed by:
Increasing the sample size .
Reducing the confidence level (1-α)100%
Reducing the source of variability in the observations ,thus
producing less variance .

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 Cautions about interval
estimates
• There are many assumptions involved in interval
estimation:
– The sample is randomly selected from a population.
– The sample size is sufficiently large to use the CLT.
– The population standard deviation is known or s is a good
estimate of σ.
– The selection of a confidence level is an arbitrary process.
– The population is not too skewed.
• As a result, interval estimates are not precise, but are
estimates or approximations.
• Larger n, repeated sampling, comparisons with other
studies, and careful sampling and survey design and
practice can improve the quality of the estimates.
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 95%Confidence Interval
• A 95% is the most 68% CI More Error
frequent reported
confidence interval Narrow CI
reported. Not that when 95% CI Medium Error
you see certain interval
estimates reported on TV Narrow CI
(for example some
business or medical 99% CI Less Error
statistics), the confidence Wider CI
level is not mentioned but
it is under stood that it is
based on a 95%
confidence level.

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