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Use the normal distribution to find a confidence interval for a difference in proportions \(p_{1}-p_{2}\) given the relevant sample results. Give the best estimate for \(p_{1}-p_{2},\) the margin of error, and the confidence interval. Assume the results come from random samples. A \(95 \%\) confidence interval for \(p_{1}-p_{2}\) given counts of 240 yes out of 500 sampled for Group 1 and 450 yes out of 1000 sampled for Group 2 .

Short Answer

Expert verified
Best estimate for \(p_{1}-p_{2}: 0.03\), Margin of Error: 0.06790, 95% Confidence Interval: (-0.03790, 0.12790).

Step by step solution

01

Calculate the Proportions

For the first group (Group 1), the proportion \(\(p_{1}\) = \frac{number of yes}{total sample}\ = \frac{240}{500} = 0.48\). For the second group (Group 2), the proportion \(\(p_{2}\) = \frac{number of yes}{total sample} = \frac{450}{1000} = 0.45\). The best estimate for \(\(p_{1}-p_{2}\) = 0.48 - 0.45 = 0.03.
02

Compute Standard Error

The Standard Error (SE) for independent samples is given by the formula \(\SE=\sqrt{\frac{\(p_{1}(1-\(p_{1})\)}{n_{1}}+\frac{\(p_{2}(1-\(p_{2})\)}{n_{2}}}\). Substituting our values: \(\SE=\sqrt{\frac{(0.48)*(0.52)}{500}+\frac{(0.45)*(0.55)}{1000}}=0.0346477\).
03

Find the Margin of Error

Margin of Error is calculated as \(Z-score * Standard Error\). For a 95% confidence interval, the Z-score is approximately 1.96. So the margin of error is \(1.96*0.0346477=0.06790\).
04

Calculate the Confidence Interval

The confidence interval for \(p_{1}-p_{2}\) is given by \((Best Estimate - margin of error, Best Estimate + margin of error)\). So, \(0.03-0.06790, 0.03+0.06790\) which is (-0.03790,0.12790). Therefore, the 95% confidence interval for \(p_{1}-p_{2}\) is (-0.03790, 0.12790).

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Key Concepts

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

Normal Distribution
The normal distribution, often referred to as the bell curve, is a fundamental concept in statistics. It describes how data points are distributed in a symmetrical pattern, where most observations cluster around the mean, and fewer observations are found as you move away from the mean. This distribution is important because many statistical tests and confidence intervals are based on the assumption that data follows a normal distribution.

Key properties of the normal distribution include:
  • The mean, median, and mode are all equal and located at the center of the distribution.
  • The distribution is symmetrical around the mean.
  • 68% of data falls within one standard deviation of the mean, 95% within two, and 99.7% within three—this is often called the "Empirical Rule".
In our exercise, we use the normal distribution to calculate the 95% confidence interval. The assumption is that the difference in proportions follows a normal distribution, which allows us to apply specific statistical methods to estimate the reliability of our result.
Difference in Proportions
When comparing two groups, it's essential to understand how their proportions differ. This measure, known as the difference in proportions, helps determine if one group has a higher or lower proportion relative to the other.

To calculate the difference in proportions:
  • Find the proportion of each group by dividing the number of successes (e.g., 'yes' responses) by the total number of observations in the group.
  • Subtract the second group's proportion from the first group's proportion.
In the given exercise, Group 1 had a proportion of 0.48 and Group 2 had a proportion of 0.45. Thus, the difference in proportions is 0.03. This value is the best estimate for the actual difference in the population, which informs us about potential differences in behavior or characteristics between the two groups.
Standard Error
Standard error is a statistical term that measures the accuracy with which a sample represents a population. It's essentially the standard deviation of the sampling distribution. A smaller standard error indicates that the sample mean is a more accurate reflection of the actual population mean.

For difference in proportions, the standard error is calculated using the formula:
  • \[ \text{SE} = \sqrt{\frac{p_1(1-p_1)}{n_1} + \frac{p_2(1-p_2)}{n_2}} \]
  • Here, \( p_1 \) and \( p_2 \) are the proportions of the two groups, and \( n_1 \) and \( n_2 \) are their respective sample sizes.
In our exercise, the standard error calculated was approximately 0.03465. This value indicates how much the sample proportions might vary from the true population proportions. It is crucial for constructing confidence intervals because it influences the margin of error, helping us understand the range in which the true difference likely falls.

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