Suppose that, for budget planning purposes, the city in given Exercise needs a better estimate of the mean daily income from parking fees.
a) Someone suggests that the city use its data to create a 95% confidence interval instead of the 90% interval first created. How would this interval be better for the city? (You need not actually create the new interval.)
b) How would the 95% interval be worse for the planners?
c) How could they achieve an interval estimate that would better serve their planning needs?
d) How many days worth of data must they collect to have 95% confidence of estimating the true mean to within $3?
Exercise :
Parking. Hoping to lure more shoppers downtown, a city builds a new public parking garage in the central business district. The city plans to pay for the structure through parking fees. During a two-month period (44 weekdays), daily fees collected averaged $126, with a standard deviation of $15.
a) What assumptions must you make in order to use these statistics for inference?
b) Write a 90% confidence interval for the mean daily income this parking garage will generate.
c) Explain in context what this confidence interval means.
d) Explain what 90% confidence means in this context.
e) The consultant who advised the city on this project predicted that parking revenues would average $130 per day. Based on your confidence interval, do you think the consultant was correct? Why?