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Burglaries in Groton, Georgia

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Last year Groton, Georgia had 512 burglaries. The police chief wants to know the average economic loss associated with burglaries in Groton and wants to know it this afternoon. Since there is not time to
analyze all 512 burglaries, the department's research analyst selects 10 burglaries at random, which show the following losses:

$550, $675, $324, $487, $1,246, $874, $595, $835, $910, and $612

What is the best estimate of the average loss on a burglary? Place an 80% confidence limit around this estimate.

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Solution Summary

The solution addresses the situation that last year Groton, Georgia had 512 burglaries. The police chief wants to know the average economic loss associated with burglaries in Groton and wants to know it this afternoon. Since there is not time to
analyze all 512 burglaries, the department's research analyst selects 10 burglaries at random, which show the following losses:

$550, $675, $324, $487, $1,246, $874, $595, $835, $910, and $612

What is the best estimate of the average loss on a burglary? Place an 80% confidence limit around this estimate.

Solution Preview

For this problem we have to construct an 80% confidence interval for the mean of the burglary losses. The 10 sample figures show two extreme values (324 and 1246) which could be regarded as outliers but because of the fact that they are practically compensating themselves you can choose to keep them and use them as data. Possible estimates for the average loss can be the median which is robust ...

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