In: Statistics and Probability
Incidentally the 95% confidence interval is (0.1608, 0.2392).
The Director went and told the minister that the probability that the disease rate is between 16.08% and 23.92% is 0.95. Explain (briefly) why this is nonsensical!
(a)
Step 1:
n = 400
= 80/400 = 0.2
n = 400 X 0.2 = 80 > 10
n (1 - ) = 400 X 0.8 = 320 > 10
Both conditions are satisied.
So, the sample can be taken as large sample
Step 2:
= 0.10
From Table, critical values of Z = 1.645
Step 3:
Confidence Interval:
So,
Answer is:
(0.1671, 0.2329)
(b)
The 95% confidence interval (0.1608, 0.2392). will be larger than the 90% confidence interval (0.1671, 0.2329) because increasing the confidence level from 90% to 95% will increase the Margin of Error, resulting in a wider confidence interval.Alarger Margin of Error produces awider confidence interval that is more likely to contain the population proportion.
(c)
To interpret the 95% confidence interval (0.1608, 0.2392) as the probability that the disease rate is between 16.08% and 23.92% is 0.95 is nonsensical because the 95% confidence interval (0.1608, 0.2392). is a range of values we are 95% confident will contain the true unknown population proportion. If repeated samples are taken and the 95% confidence interval iscalculated foreach sample, 95% of these confidence intervals will contain the true unknown population proportion.