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(2)
(3)
Then we were constructing confidence interval for the population mean based
on _________ distribution (one-sample z statistic):
This holds approximately for large samples even if the assumption (2) is not
satisfied. Why?
Issue: In a more realistic setting, assumption (3) is not satisfied, i.e., the
standard deviation is unknown.
So what can we do to handle real-life problems?
We replace the population standard deviation, by its estimate:
The t-distributions
We specify a particular t-distribution by giving its degrees of freedom (d.f.).
Difference:
where t* is the upper (1-C)/2 critical value for the tn-1 distribution, i.e.,
Ex: What critical value t* from Table C would you use to make a CI for the
population mean in each of the following situations?
a) A 95% CI based on n = 10 observations.
Ex: Suppose the JC-Penney wishes to know the average income of the
households in the Dallas area before they decide to open another store here. A
random sample of 21 households is taken and the income of these sampled
households turns out to average $45,000 with a standard deviation of $15,000.
(a)
Give a 90% confidence interval for the unknown average income of the
households in Dallas area.
(b)
Is there evidence at 10% level that the average income of the household
in the Dallas area is $48,000? Use the four-step process.
Male (in $)
29300
41500
40400
38500
43500
37800
69500
41200
38400
59200
Female (in $)
28800
41600
39800
38500
42600
38000
69200
40100
38200
58500
(a) Compute a 95% confidence interval for the mean difference = 1-2.
The sample average of the paired difference
x=
and the sample standard deviation of the paired difference
s=
(b) Is there evidence at 5% level that the male starting salary is significantly
different from the female starting salary? Use the four-step process.
Robustness of t procedures
A confidence interval is called robust if the confidence level does not change very
much when the conditions for use of the procedure are violated.
The t confidence interval is exact when the distribution of the population is exactly
_________. However, no real data are exactly ________.
The usefulness of the t procedures in practice therefore depends on