Point and Interval Estimation

ESTIMATION OF PARAMETERS
POINT ESTIMATION
is the process of finding a simple
value, called point estimate,
from a random sample of a
population, to approximate a
population parameter.
Therefore,
the point estimate of the μ is the
x and
the point estimate of the σ2 is s2.
Example:

Observatio x
μ = Σx ns
N 1 6
= 28 2 2
5 3 8
4 9
μ =
5.6 5 3
Σx = 28
Sample Sample
Mean
(6, 2) 4
(6, 8) 7
(6, 9) 7.5
(6, 3) 4.5

μ =
 Sample Sample
Mean
(6, 2, 8) 5.3
(6, 2, 9) 5.7
(6, 2, 8, 9) 6.25
(6, 2, 8, 3) 4.75

μ =
POINT AND INTERVAL ESTIMATION
Each sample mean is a point
estimate of the population mean,
but they are still different from
the population mean.
Confidence Interval is a range
of values within which the
population mean is most likely to
be located.
POINT AND INTERVAL ESTIMATION
In approximating the population
mean by determining a
confidence interval, we use
confidence levels.
Confidence levels refer to the
probability that the confidence
interval contains the true
population parameter.
Confidence levels of 90%, 95%
and 99% are usually chosen.
POINT AND INTERVAL ESTIMATION

confidence level = (1 – α) 100%

where: α = probability that the
confidence interval does not
contain the true population
parameter.
Critical value is the value that
indicates the point beyond which
the true population parameter is
not found.
INTERVAL ESTIMATE OF POPULATION
MEAN WITH KNOWN VARIANCE
INTERVAL ESTIMATE OF POPULATION
MEAN WITH KNOWN VARIANCE

if: α =
0
.
0
5 95
%
μ
EXAMPLE:
The mean score of a random sample
of 49 Grade 11 students who took
the first periodic test is calculated to
be 78.
The population variance is known to
be 0.16.
a. Find the 95% confidence interval
for the mean of the entire Grade
11 students.
STEP 1:
Find the value of zα/2
STEP 2:
Substitute the valuesx of , σ and
zα/2
ANSWER:
77.89 < μ < 78.11
Lower confidence limit = 77.89
Upper confidence limit = 78.11
INTERPRETATION:
The researcher is 95% confident that
the sample mean (78) differs from
the μ by no more than 0.112; and
that the μ is between x 77.89 and
INTERVAL ESTIMATE OF POPULATION
MEAN WITH KNOWN VARIANCE
Confidence Interval can also be
written as:
x x
( - E or:
, +E)
-xE < μ < x + E

where margin of error E=

STEP 1:
Find the value of zα/2
STEP 2:
Find α, then find E
STEP 3:
Substitute the values x of and E in
x - E < μx<
the confidence interval
+E
EXERCISE1:
Assuming normality, use the given
confidence level and sample data
below to find the margin of error and
the confidence interval for
estimating the population
parameter.
Confidence level = 99%
n
x = 50
= 18,000
ANSWER:
17,089.60 < μ < 18,910.40
E = 910.40
INTERPRETATION:
The researcher is 99% confident that
the sample mean (18,000) differs
from the μ by no more than 910.40;
and that the μ is between 17,089.60
andx 18,910.40 when the is
 MARGIN OF ERROR

Alternative Formula
in determining the margin
of error:
upper confidence limit- lower
E= confidence limit
2
COMMON CONFIDENCE LEVELS
WITH THEIR CORRESPONDING
RELIABILITY FACTOR
(1-α)100%
Confidence Zα/2
Level
99% 2.575
95% 1.96
90% 1.645
EXERCISE2:
The mean and standard deviation
of the scores of a random sample
of 45 Grade 10 students who took
the final test are calculated to be
76 and 12.5 respectively.
a. Find the 95% confidence interval
for the mean of the entire Grade
10 students.
b. Find the lower and upper
EXERCISE3:
The mean and standard deviation
of the blood sugar level of
randomly selected 50 patients in a
hospital are 130 mg/dl and 4.6
mg/dl, respectively.
a. Find the 90% confidence interval
for the mean of all patients in the
said hospital.
b. Find the lower and upper
SAMPLE SIZE FOR ESTIMATING POPULATION MEAN

The size of the sample is

important in estimating the
population mean. The following
formula can be used to
determine the appropriate
The formula for sample size to
sample size.
zα/2σ
estimate the population 2 is
mean

E
EXERCISES:
Find the minimum sample size required
to estimate an unknown population
mean using the following given data:
a. Confidence level = 95%
Margin of error = 75
σ = 250
b. Confidence level = 90%
Margin of error = 0.891
σ2 = 9
TEST YOURSELF:
A researcher wants to estimate the daily
expenses of college students. He wants
a 99% confidence level and a 40 margin
of error. How many students must he
randomly select if in the previous survey
σ = 99.50?