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The percentage of people not covered by health care insurance in 2003 was \(15.6 \%\) (Statistical Abstract of the United States, 2006 ). A congressional committee has been charged with conducting a sample survey to obtain more current information. a. What sample size would you recommend if the committee's goal is to estimate the current proportion of individuals without health care insurance with a margin of error of \(.03 ?\) Use a \(95 \%\) confidence level. b. Repeat part (a) using a \(99 \%\) confidence level.

Short Answer

Expert verified
a. Sample size for 95% confidence: 562 b. Sample size for 99% confidence: 972

Step by step solution

01

Understanding the Problem

We need to calculate the sample size required to estimate the proportion of individuals without health care insurance. The margin of error (E) is given as 0.03. We will do this calculation for both a 95% confidence level and a 99% confidence level.
02

Understanding the Formula

The formula to find the sample size (n) given the proportion (p), margin of error (E), and confidence level is \( n = \left(\frac{Z^* \times \sqrt{p(1-p)}}{E}\right)^2 \). Here, \(Z^*\) is the Z-score corresponding to the desired confidence level.
03

Calculating for 95% Confidence Level

For a 95% confidence level, \(Z^* = 1.96\). The given proportion \(p=0.156\). Substituting into the formula:\[ n = \left(\frac{1.96 \times \sqrt{0.156 \times (1-0.156)}}{0.03}\right)^2 \] Calculate \(\sqrt{0.156 \times 0.844} = \sqrt{0.131664} \approx 0.3628\). The sample size is:\[ n = \left(\frac{1.96 \times 0.3628}{0.03}\right)^2 \] Calculate \(1.96 \times 0.3628 \approx 0.711088\) and \(\frac{0.711088}{0.03} \approx 23.70293\). Finally, \((23.70293)^2 \approx 561.90\). Thus, the sample size is approximately 562.
04

Calculating for 99% Confidence Level

For a 99% confidence level, \(Z^* = 2.576\). Using the same proportion \(p=0.156\):\[ n = \left(\frac{2.576 \times \sqrt{0.156 \times (1-0.156)}}{0.03}\right)^2 \] Reusing the previously calculated \(\sqrt{0.131664} \approx 0.3628\).\[ n = \left(\frac{2.576 \times 0.3628}{0.03}\right)^2 \] Calculate \(2.576 \times 0.3628 \approx 0.9347728\) and \(\frac{0.9347728}{0.03} \approx 31.1590933\). Finally,\((31.1590933)^2 \approx 971.89\). Thus, the sample size is approximately 972.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Confidence Interval
In statistics, confidence interval is a vital concept that helps determine the range within which a population parameter is expected to lie. When we say we have a 95% confidence interval for a statistic, it means if we were to take 100 different samples and compute a confidence interval for each sample, then approximately 95 of the intervals will contain the true population parameter.
A confidence interval has two bounds – the lower and the upper. In our example, the congressional committee wants to assess the proportion of individuals without health care insurance. By using different confidence levels, such as 95% or 99%, we adjust the Z-score, which is critical in determining how confident we are about our range.
For a 95% confidence level, our Z-score is 1.96, and for 99%, it is 2.576. The larger the confidence level, the wider the confidence interval, because we desire more certainty, covering a broader range to ensure the true parameter lies within.
Margin of Error
Margin of error is another essential concept closely tied to confidence intervals. It indicates the extent of variability we can expect if the survey was to be repeated multiple times. It essentially provides a cushion of error range around our sample estimate.
For instance, when the margin of error is 0.03 in our problem, it means that there is a potential error of 3 percentage points above or below the sample statistic that was estimated.
The margin of error is directly influenced by the confidence level and the sample size. A higher confidence level or a smaller sample size will typically increase the margin of error. Therefore, when calculating the required sample size, keeping the desired margin of error in mind helps us maintain a precise level of accuracy in our estimates.
Proportion Estimation
Proportion estimation is important in statistics when we are interested in determining what fraction, or percentage, of a population has a certain trait. In the provided problem, it focuses on estimating the percentage of people without health care insurance.
To make accurate estimates, we often begin by using a sample from the population to generalize about the whole population. The formula for sample size calculation incorporates the estimated proportion \( p \). For example, if previously 15.6% of people were uninsured, this is used as an estimate for the calculation.
This estimation depends heavily on factors like the size of the sample, precision of estimates, and the risk level we are willing to take. A larger sample size generally leads to more reliable and stable estimates, reducing the uncertainty around the true population proportion.

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Most popular questions from this chapter

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