Understanding Business Statistics

CHAPTER 7

Statistical Inference

ESTIMATING A POPULATION MEAN

LEARNING OBJECTIVES

After completing the chapter, you should be able to

1. Define statistical inference and give the main reasons for sampling.
2. Describe the various sample selection procedures and illustrate how a simple random sample can be selected.
3. Build and interpret a confidence interval estimate of a population mean using key properties of the appropriate sampling distribution.
4. Use the t distribution to build a confidence interval estimate when the population standard deviation is unknown.
5. Determine the sample size needed to build a confidence interval given a desired confidence level and margin of error.

EVERYDAY STATISTICS

Counting Controversy

How long would it take you to count to three hundred million? Starting now, at a rate of one number per second, counting twenty-four hours per day, the task would take about nine and a half years (3,472 days to be precise). With the US population approaching 334 million by 2020, locating and counting everyone in the country is an immense task. To conduct the 2010 Census, the U.S. Census Bureau employed 635,000 people. The next one will require an even greater effort.

This massive constitutionally-mandated project drastically affects the balance of political influence and the distribution of government funds. As one census official stated: “This is where we allocate power ...