Confidence Intervals
A major client of your company is interested in the salary distributions of jobs in the state of Minnesota that range from $30,000 to $250,000 per year. As a Business Analyst, your boss asks you to research and analyze the salary distributions. You are given a spreadsheet that contains the following information:
- A listing of the jobs by title
- The salary (in dollars) for each job
a. What are confidence intervals?
b. What is a point estimate?
c. What is the best point estimate for the population mean?
d. What is the best point estimate for the population proportion?
e. Why do we need confidence intervals?
2. Using the data from the ‘Data’ tab in this workbook, construct a 95% confidence interval for the population mean. Assume that your data is normally distributed and σ is unknown.
2a. Calculate degrees of freedom and the Critical Value.
3. Using the data from the ‘Data’ tab in this workbook, we find that 27.6%of jobs have a salary more than 75,000 dollars a year. Construct a 99% confidence interval estimate of this percentage.
4a. When constructing confidence intervals, which is larger: a 95% confidence interval or a 99% confidence interval? Explain.
Answer preview for Confidence Intervals
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