Question 7.6: Johannesburg Street Vendor By-law Study A recent survey amon......

Applied Business Statistics – Methods and Excel-based Applications [872200]

Johannesburg Street Vendor By-law Study

A recent survey amongst 240 randomly selected street vendors in Johannesburg showed that 84 of them felt that local by-laws still hampered their trading.

Find the 90% confidence interval for the true proportion, π, of all Johannesburg street vendors who believe that local by-laws still hamper their trading.

Step-by-Step

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From the data, x = 84 (number of ‘success’ outcomes) and n = 240 (sample size), so the sample proportion, p = $\frac{84}{240}$ = 0.35.

Using the sample proportion, p, the standard error of p is given by:

\sigma _p\approx \sqrt{\frac{p(1-p)}{n} }=\sqrt{\frac{0.35(1-0.35)}{240} }=0.0308

The z-value is 1.645 for the 90% confidence level (Table 1, Appendix 1).

The estimated margin of error is 1.645 × 0.0308 = 0.0507 (5.07%).

Thus the 90% confidence interval for the population of all street vendors who feel that the local by-laws still hamper their trading is given by:

lower limit: 0.35 – 1.645(0.0308) = 0.35 – 0.0507 = 0.299
upper limit: 0.35 + 1.645(0.0308) = 0.35 + 0.0507 = 0.401

The 90% confidence interval estimate for π is given by 0.299 ≤ π ≤ 0.401.

Management Interpretation

There is a 90% chance that the true percentage of all Johannesburg street vendors who feel that the local by-laws still hamper their trading lies between 29.9% and 40.1%.

TABLE 1 The standard normal distribution (z) This table gives the area under the standard normal curve between 0 and z P[0 < Z < z] In Excel (2016): use NORM.S.DIST(z, cumulative = True) to find P(– ∞ < Z < z)
Z	0.00	0.01	0.02	0.03	0.04	0.05	0.06	0.07	0.08	0.09
0.0	0.0000	0.0040	0.0080	0.0120	0.0160	0.0199	0.0239	0.0279	0.0319	0.0359
0.1	0.0398	0.0438	0.0478	0.0517	0.0557	0.0596	0.0636	0.0675	0.0714	0.0753
0.2	0.0793	0.0832	0.0871	0.0910	0.0948	0.0987	0.1026	0.1064	0.1103	0.1141
0.3	0.1179	0.1217	0.1255	0.1293	0.1331	0.1368	0.1406	0.1443	0.1480	0.1517
0.4	0.1554	0.1591	0.1628	0.1664	0.1700	0.1736	0.1772	0.1808	0.1844	0.1879
0.5	0.1915	0.1950	0.1985	0.2019	0.2054	0.2088	0.2123	0.2157	0.2190	0.2224
0.6	0.2257	0.2291	0.2324	0.2357	0.2389	0.2422	0.2454	0.2486	0.2517	0.2549
0.7	0.2580	0.2611	0.2642	0.2673	0.2703	0.2734	0.2764	0.2793	0.2823	0.2852
0.8	0.2881	0.2910	0.2939	0.2967	0.2995	0.3023	0.3051	0.3078	0.3106	0.3133
0.9	0.3159	0.3186	0.3212	0.3238	0.3264	0.3289	0.3315	0.3340	0.3365	0.3389
1.0	0.3413	0.3438	0.3461	0.3485	0.3508	0.3531	0.3554	0.3557	0.3599	0.3621
1.1	0.3643	0.3665	0.3686	0.3708	0.3729	0.3749	0.3770	0.3790	0.3810	0.3830
1.2	0.3849	0.3869	0.3888	0.3907	0.3925	0.3944	0.3962	0.3980	0.3997	0.4015
1.3	0.4032	0.4049	0.4066	0.4082	0.4099	0.4115	0.4131	0.4147	0.4162	0.4177
1.4	0.4192	0.4207	0.4222	0.4236	0.4251	0.4265	0.4279	0.4292	0.4306	0.4319
1.5	0.4332	0.4345	0.4357	0.4370	0.4382	0.4394	0.4406	0.4418	0.4429	0.4441
1.6	0.4452	0.4463	0.4474	0.4484	0.4495	0.4505	0.4515	0.4525	0.4535	0.4545
1.7	0.4554	0.4564	0.4573	0.4582	0.4591	0.4599	0.4608	0.4616	0.4625	0.4633
1.8	0.4641	0.4649	0.4656	0.4664	0.4671	0.4678	0.4686	0.4693	0.4699	0.4706
1.9	0.4713	0.4719	0.4726	0.4732	0.4738	0.4744	0.4750	0.4756	0.4761	0.4767
2.0	0.4772	0.4778	0.4783	0.4788	0.4793	0.4798	0.4803	0.4808	0.4812	0.4817
2.1	0.4821	0.4826	0.4830	0.4834	0.4838	0.4842	0.4846	0.4850	0.4854	0.4857
2.2	0.4861	0.4864	0.4868	0.4871	0.4875	0.4878	0.4881	0.4884	0.4887	0.4890
2.3	0.48928	0.48956	0.48983	0.49010	0.49036	0.49061	0.49086	0.49111	0.49134	0.49158
2.4	0.49180	0.49202	0.49224	0.49245	0.49266	0.49286	0.49305	0.49324	0.49343	0.49361
2.5	0.49379	0.49396	0.49413	0.49430	0.49446	0.49461	0.49477	0.49492	0.49506	0.49520
2.6	0.49534	0.49547	0.49560	0.49573	0.49585	0.49598	0.49609	0.49621	0.49632	0.49643
2.7	0.49653	0.49664	0.49674	0.49683	0.49693	0.49702	0.49711	0.49720	0.49728	0.49736
2.8	0.49744	0.49752	0.49760	0.49767	0.49774	0.49781	0.49788	0.49795	0.49801	0.49807
2.9	0.49813	0.49819	0.49825	0.49831	0.49836	0.49841	0.49846	0.49851	0.49856	0.49861
3.0	0.49865	0.49869	0.49874	0.49878	0.49882	0.49886	0.49889	0.49893	0.49897	0.49900
3.1	0.49903	0.49906	0.49910	0.49913	0.49916	0.49918	0.49921	0.49924	0.49926	0.49929
3.2	0.49931	0.49934	0.49936	0.49938	0.49940	0.49942	0.49944	0.49946	0.49948	0.49950
3.3	0.49952	0.49953	0.49955	0.49957	0.49958	0.49960	0.49961	0.49962	0.49964	0.49965
3.4	0.49966	0.49968	0.49969	0.49970	0.49971	0.49972	0.49973	0.49974	0.49975	0.49976
3.5	0.49977	0.49978	0.49978	0.49979	0.49980	0.49981	0.49981	0.49982	0.49983	0.49983
3.6	0.49984	0.49985	0.49985	0.49986	0.49986	0.49987	0.49987	0.49988	0.49988	0.49989
3.7	0.49989	0.49990	0.49990	0.49990	0.49991	0.49991	0.49991	0.49992	0.49992	0.49992
3.8	0.49993	0.49993	0.49993	0.49994	0.49994	0.49994	0.49994	0.49995	0.49995	0.49995
3.9	0.49995	0.49995	0.49996	0.49996	0.49996	0.49996	0.49996	0.49996	0.49997	0.49997
4.0	0.49997	0.49997	0.49997	0.49997	0.49997	0.49997	0.49998	0.49998	0.49998	0.49998