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A Gallup poll taken during June 2011 estimated that \(8.8 \%\) of U.S. adults were unemployed. The poll was based on the responses of 30,000 U.S. adults in the workforce. Gallup reported that the margin of error associated with the poll is ±0.3 percentage points. Explain how they got this result. (Source: www.gallup.com/poll/125639/Gallup-Daily-Workforce aspx.)

Short Answer

Expert verified
Gallup's margin of error of ±0.3% is based on a sample size of 30,000, calculated using a standard error and a z-score for 95% confidence.

Step by step solution

01

Identify the Population and Sample Sizes

The total population size is not given, but the sample size is given as 30,000. This is the number of U.S. adults from which the poll responses were taken.
02

Recognize the Point Estimate and Margin of Error Formula

The poll provides a point estimate of 8.8% unemployment. The margin of error formula in a proportion/probability situation is typically calculated using the formula for the standard error and a confidence coefficient: \( ME = z \times \sqrt{ \frac{p(1-p)}{n} } \), where \( p \) is the sample proportion, \( n \) is the sample size, and \( z \) is the z-score corresponding to a chosen confidence level.
03

Calculate the Sample Proportion

Convert the percentage of unemployed adults into a proportion: \( p = \frac{8.8}{100} = 0.088 \).
04

Estimate the Standard Error

The standard error (SE) for a proportion is given by the formula \( SE = \sqrt{ \frac{p(1-p)}{n} } \). Substituting the known values: \( SE = \sqrt{ \frac{0.088(1-0.088)}{30000} } \approx 0.00172 \).
05

Determine the Z-Score for the Confidence Level

The margin of error of ±0.3% is typical for a 95% confidence level, for which the z-score used is 1.96.
06

Compute the Margin of Error

Now, calculate the margin of error using the formula: \( ME = z \times SE = 1.96 \times 0.00172 \approx 0.00337 \). Convert this to a percentage: \( 0.00337 \times 100 \approx 0.337 \% \), which rounds to ±0.3%.

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Key Concepts

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

Sample Size
The concept of sample size is crucial in statistical analysis, especially when conducting surveys and polls. It refers to the number of observations or individuals included in your sample. In the Gallup poll example, the sample size is composed of 30,000 U.S. adults.
A larger sample size often results in more accurate estimates of the population parameter. This is because it reduces the variability, or the range, of the sample mean around the true population mean.
When deciding on a sample size, consider:
  • The objectives of your research
  • The desired level of precision
  • The resources available for conducting the survey
In general, as sample size increases, the margin of error decreases, leading to more reliable results.
Confidence Level
The confidence level in a statistical context refers to the degree of certainty that the calculated confidence interval contains the true population parameter.
In other words, it tells you how sure you can be that your sample reflects the broader population. A common confidence level used is 95%, which is implied in the example of the Gallup Poll.
A 95% confidence level means that if you were to take 100 different samples and compute the confidence interval for each one, successfully capturing the true population parameter in 95 of those intervals.
Choosing a higher confidence level, like 99%, will make the confidence interval wider, reflecting more uncertainty; a lower one, like 90%, will make it narrower but riskier. Whether to choose a higher or lower one depends on how much risk you’re willing to take in your estimates.
Standard Error
The standard error (SE) is a measure of the statistical accuracy of an estimate. It gauges how much the sample mean is expected to vary from the actual population mean.
In simple terms, the smaller the standard error, the more precise the estimate will be. It is calculated by dividing the sample's standard deviation by the square root of the sample size.
For proportions, as used in the Gallup poll, it is computed using the formula: \[ SE = \sqrt{ \frac{p(1-p)}{n} } \] where \(p\) is the sample proportion and \(n\) is the sample size.
The lower the standard error, the less variability there is in the sample estimates, which makes them more 'trustworthy' and actionable.
Point Estimate
A point estimate provides a single value as an estimate of a population parameter. It is like taking a snapshot of that parameter at a specific point in time.
In the Gallup poll, the point estimate is the percentage of unemployed adults, which was reported as 8.8%. Point estimates can be influenced by sample size and measurement precision, but they do not account for uncertainty or error by themselves.
This uncertainty is where margins of error come into play, providing a range that we expect the actual population parameter to fall into based on our sample.
It's important to pair point estimates with a measure of reliability, like a confidence interval, to get a better understanding of where the true parameter is likely to be.

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Most popular questions from this chapter

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