Chapter 7: Problem 10
Consider two independent binomial experiments. In the first one, 40 trials had 15 successes. In the second one, 60 trials had 6 successes. (a) Is it appropriate to use a normal distribution to approximate the \(\hat{p}_{1}-\hat{p}_{2}\) distribution? Explain. (b) Find a \(95 \%\) confidence interval for \(p_{1}-p_{2}\) (c) IBased on the confidence interval you computed, can you be \(95 \%\) confident that \(p_{1}\) is more than \(p_{2} ?\) Explain.
Short Answer
Step by step solution
Check Normal Approximation Conditions
Calculate Standard Error
Compute Confidence Interval
Interpret the Confidence Interval
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Key Concepts
These are the key concepts you need to understand to accurately answer the question.
Binomial Distribution
- Probability of exactly k successes in n trials: \(P(X=k) = \binom{n}{k} p^k (1-p)^{n-k}\)
In our example exercises, the first experiment had 40 trials with a probability of success of 0.375, and the second had 60 trials with a success probability of 0.1. This setup shows the use of binomial distribution in real-life data collection, like experiments or surveys.
Confidence Interval
In practice, to calculate a 95% confidence interval for the difference in proportions \(p_1 - p_2\), we use the formula:
- \( CI = (\hat{p}_1 - \hat{p}_2) \pm Z \times SE \)
Normal Approximation
To be eligible for using normal approximation, the rule of thumb is:
- Both \(n\hat{p}\) and \(n(1-\hat{p})\) should be 5 or greater.
Hypothesis Testing
The process involves:
- Stating a null hypothesis (\(H_0\)), which is a default assumption, and an alternative hypothesis (\(H_a\)), which indicates the effect or difference we suspect.
- Calculating a test statistic and comparing it to a critical value or using a p-value to see if it falls within a pre-set significance level, such as 0.05.