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The report "2005 Electronic Monitoring \& Surveillance Survey: Many Companies Monitoring, Recording, Videotapingand Firing-Employees" (American Management Association, 2005) summarized a survey of 526 U.S. businesses. The report stated that 137 of the 526 businesses had fired workers for misuse of the Internet, and 131 had fired workers for e-mail misuse. Assume that the sample is representative of businesses in the United States. a. Construct and interpret a \(95 \%\) confidence interval for the proportion of U.S. businesses that have fired workers for misuse of the Internet. b. What are two reasons why a \(90 \%\) confidence interval for the proportion of U.S. businesses that have fired workers for misuse of e-mail would be narrower than the \(95 \%\) confidence interval calculated in Part (a)?

Short Answer

Expert verified
a. The \(95 \%\) confidence interval for businesses firing their employees due to Internet misuse is \(0.22\) to \(0.30\), meaning there is \(95 \%\) confidence that the true proportion is within this range. b. A \(90 \%\) confidence interval would be narrower because it implies less certainty and uses a smaller Z-score, thereby resulting in a smaller margin of error.

Step by step solution

01

Compute the proportion and standard error

Firstly, find the proportion \(p\) of businesses that have fired workers for Internet misuse by dividing the number that have (137) by the total surveyed (526). This gives \(p = 137/526 = 0.26\). Now, calculate the standard error \(SE\) using the formula for the standard error of a proportion, \(SE = \sqrt{ p(1-p) / n }\), where \( n \) is the number of businesses. This results in \(SE = \sqrt{ 0.26 * (1 - 0.26) / 526 } = 0.02\).
02

Calculate the confidence interval

A \(95\%\) confidence interval for a proportion is given by \(p \pm 1.96 Se\), where \(1.96\) is the Z-score for \(95\%\) confidence level. Substituting the calculated values gives \(0.26 \pm 1.96 * 0.02\), yielding an interval of \(0.22\) to \(0.30\). This means there is \(95\%\) confidence that between \(22\%\) and \(30\%\) of all U.S. businesses have fired employees for Internet misuse.
03

Explain why a 90% confidence interval would be narrower

There are two main reasons why a \(90\%\) confidence interval for the proportion of businesses that have fired for e-mail misuse would be narrower than a \(95\%\) interval. Firstly, a lower confidence level implies less certainty about the range in which the true proportion lies, which leads to a narrower interval. Secondly, the Z-score corresponding to a \(90\%\) confidence level (\(1.645\) instead of \(1.96\)) is smaller, meaning that the margin of error (Z-score times the standard error) is also smaller.

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Key Concepts

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

Proportion
The concept of proportion is fundamental in statistics and helps us understand the part of a whole in a specific group. In our context, the proportion represents the fraction of businesses that have taken certain actions, like firing employees for internet misuse. To find a proportion, you divide the number of occurrences by the total number of observations. For example, with 137 businesses out of 526 firing employees for internet misuse, the proportion would be calculated as follows:- Proportion (\( p \)) = \( rac{137}{526} \) = \( 0.26 \).This means that 26% of the surveyed businesses reported firing employees specifically for this issue. Understanding proportions helps us make sense of partial data in comparison to a whole, making it easier to derive meaningful insights from statistical surveys.
Standard Error
Standard Error (SE) is a measure of the accuracy with which a sample distribution represents a population. It is crucial in the construction of confidence intervals, as it influences the width of these intervals.The formula for standard error of a proportion is:- \( SE = \sqrt{\frac{p(1-p)}{n}} \)where \( p \) is the proportion, and \( n \) is the sample size. In our example, the proportion (\( p \)) is 0.26, and the sample size (\( n \)) is 526 businesses. Plugging in these values gives us:- \( SE = \sqrt{\frac{0.26(1-0.26)}{526}} \) \( \approx 0.02 \).A smaller standard error indicates that the sample mean or proportion is closer to the true population mean or proportion, enhancing the reliability of statistical inference.
Z-score
The Z-score is a statistical measurement that describes a data point's relation to the mean of a group of data points. It is measured in terms of standard deviations from the mean. In confidence intervals, the Z-score helps determine the range within which we expect the true population parameter (like a proportion) to lie. - For a 95% confidence level, the Z-score is 1.96. - For a 90% confidence level, it's 1.645. The Z-score essentially scales the standard error to create the margin of error for the confidence interval. A higher Z-score increases the margin, thus widening the interval to reflect more confidence. In simpler terms, the Z-score ensures we cover enough ground around our estimated proportion or mean to be fairly certain about our range. This helps us make strong, data-backed decisions.
Internet Misuse
Internet misuse refers to the inappropriate use of the internet by employees at their workplace. This could include activities like visiting non-work-related websites, social media misuse, or excessive personal browsing during work hours. From the surveyed businesses, 26% reported firing employees for such misuse. This indicates that internet misuse is a significant concern for organizations, leading to disciplinary actions such as firings. Understanding internet misuse and its consequences helps businesses develop better policies, maintain productivity, and avoid legal or ethical issues linked to improper use of company resources. By analyzing statistical data on internet misuse, companies can better prepare preventative measures and guide employee conduct.
E-mail Misuse
E-mail misuse involves the inappropriate use of company email for non-work purposes. This can range from sending personal e-mails, which may seem harmless, to distributing confidential information or engaging in phishing, which can be harmful to the business. From the survey, 131 out of 526 businesses reported firing employees for such misuse, showing a similar level of concern as in internet misuse. E-mail misuse can lead to loss of productivity, security breaches, and potential legal issues for businesses. As workplaces increasingly depend on electronic communication, understanding email misuse's implications and stats guides businesses in implementing stricter policies, educating employees on acceptable use, and protecting their digital communications.

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