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Confidence Interval for Mean Predicted Value Example 1 in this section illustrated the procedure for finding a prediction interval for an individual value of y. When using a specific value\({x_0}\)for predicting the mean of all values of y, the confidence interval is as follows:

\(\hat y - E < \bar y < \hat y + E\)

where

\(E = {t_{\frac{\alpha }{2}}}{s_e}\sqrt {\frac{1}{n} + \frac{{n{{\left( {{x_0} - \bar x} \right)}^2}}}{{n\left( {\sum {{x^2}} } \right) - {{\left( {\sum x } \right)}^2}}}} \)

The critical value\({t_{\frac{\alpha }{2}}}\)is found with n - 2 degrees of freedom. Using the 23 pairs of chocolate/Nobel data from Table 10-1 on page 469 in the Chapter Problem, find a 95% confidence interval estimate of the mean Nobel rate given that the chocolate consumption is 10 kg per capita.

Short Answer

Expert verified

The 95% confidence interval for the mean number of Nobel Laureates for the given value of chocolate consumption equal to 10 kgs is (17.1,26.0).

Step by step solution

01

Given information

Data are given for two variables 鈥淐hocolate Consumption鈥 and 鈥淣umber of Nobel Laureates鈥.

Let x denote the variable 鈥淐hocolate Consumption鈥.

Let y denote the variable 鈥淣umber of Nobel Laureates鈥.

Referring to Example 1 of section 10-3, the provided information is:

Sample size, n = 23

\({s_e} = {\bf{6}}{\bf{.262665}}\)

\(\hat y = - 3.37 + 2.49x\)

02

Formula of the confidence interval for predicting the mean of all values of y when specific value \({{\bf{x}}_{\bf{0}}}\) is known

The confidence interval for predicting the mean of all values of y by using the specific value\({x_0}\)is as follows:

\(CI = \left( {\hat y - E,\hat y + E} \right)\)

where\(E = {t_{\frac{\alpha }{2}}}{s_e}\sqrt {\frac{1}{n} + \frac{{n{{\left( {{x_0} - \bar x} \right)}^2}}}{{n\left( {\sum {{x^2}} } \right) - {{\left( {\sum x } \right)}^2}}}} \)

The critical value \({t_{\frac{\alpha }{2}}}\) (also known as t multiplies) is found with n - 2 degrees of freedom and the significance level.

03

Predicted value at \(\left( {{x_0}} \right)\)

Substituting the value of\({x_0} = 10\)in the regression equation, the predicted value is obtained as follows:

\(\begin{aligned}{c}\hat y &= - 3.37 + 2.49x\\ &= - 3.37 + 2.49\left( {10} \right)\\ &= 21.53\end{aligned}\)

04

Level of significance and degrees of freedom

The following formula is used to compute the level of significance

\(\begin{aligned}{c}{\rm{Confidence}}\;{\rm{Level}} &= 95\% \\100\left( {1 - \alpha } \right) &= 95\\1 - \alpha &= 0.95\\ &= 0.05\end{aligned}\)

The degrees of freedom for computing the value of the t-multiplier are shown below:

\(\begin{aligned}{c}df &= n - 2\\ &= 23 - 2\\ &= 21\end{aligned}\)

The two-tailed value of the t-multiplier for level of significance equal to 0.05 and degrees of freedom equal to 21 is equal to 2.0796.

05

Value of \(\bar x,\)\(\sum {{{\bf{x}}^{\bf{2}}}} \)and \(\sum {\bf{x}} \)

The following calculations are done to compute the \(\sum {{x^2}} \)and \(\sum x \):

The value of\(\bar x\)is computed as follows:

\(\begin{aligned}{c}\bar x &= \frac{{\sum x }}{n}\\ &= \frac{{134.5}}{{23}}\\ &= 5.847826\end{aligned}\)

06

Confidence interval

Substitute the values obtained from above to calculate the value of margin of error (E) as shown:

\(\begin{aligned}{c}E &= {t_{\frac{\alpha }{2}}}{s_e}\sqrt {\frac{1}{n} + \frac{{n{{\left( {{x_0} - \bar x} \right)}^2}}}{{n\left( {\sum {{x^2}} } \right) - {{\left( {\sum x } \right)}^2}}}} \\ &= \left( {2.0796} \right)\left( {6.262665} \right)\sqrt {\frac{1}{{23}} + \frac{{23{{\left( {10 - 5.847826} \right)}^2}}}{{23\left( {1023.05} \right) - {{\left( {134.5} \right)}^2}}}} \\ &= 4.44286\end{aligned}\)

Thus, the confidence interval becomes:

\(\begin{aligned}{c}CI &= \left( {\hat y - E,\hat y + E} \right)\\ &= \left( {21.53 - 4.44286,21.53 + 4.44286} \right)\\ &= \left( {17.0871,25.9729} \right)\\ &= \left( {17.1,26.0} \right)\end{aligned}\)

Therefore, 95% confidence interval for the mean number of Nobel Laureates for the given value of chocolate consumption equal to 10 kgs is (17.1, 26.0).

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