Question

if we have a data set containing salary records of employees in a hospital, and we are able to construct a 95% ci of the average salary, which is [$66,000, $92,000], now dr. clark claims that the average salary of employees in this hospital is higher than $105,000, what would you say to him? how could you convince him? please write down your reasoning, together with supporting facts, say, graphs, background probability knowledge, etc.

Answer 1

Ans:

95% CI of the average salary is (66000,92000)

As,both lower and upper limit of the above confidence interval is less than 105,000,it does not support the claim that the average salary of employees in this hospital is higher than $105,000.

or from the definition of CI,if we construct many confidence intervals like this,95% of the confidence interval will contain the true value of average salary that will be between 66000 and 92000.We are 95% confident that true average salary is between 66000 and 92000.