By now it is well known that Target Corporation (Target) \"knew a teen girl was
ID: 3357567 • Letter: B
Question
By now it is well known that Target Corporation (Target) "knew a teen girl was preg- nant before her father did". Not only was the story told many times over in the New York Times, but it also became one of the lead examples illustrating the intrinsic value of "big data". A bit creepy, yes, but basically Target uses a pregnancy-prediction score, inferred from past purchases, to develop a pregnancy-likelihood and confidence interval on every woman who shops at Target. They use this score to target baby product ads at the right time and to the right people If you were a statistician at the Target corporation, and you were given the data of size 10,000 with an average of pregnancy-prediction score of 0.6 and standard deviation of 0.04, can you provide a 95% confidence interval for one single women possibly entering the Tar- get storeExplanation / Answer
n = 10000
x-bar = 0.6
s = 0.04
% = 95
Standard Error, SE = s/n = 0.04/10000 = 0.0004
Degrees of freedom = n - 1 = 10000 -1 = 9999
t- score = 1.960201209
Width of the confidence interval = t * SE = 1.96020120850384 * 0.0004 = 0.00078408
Lower Limit of the confidence interval = x-bar - width = 0.6 - 0.000784080483401535 = 0.59921592
Upper Limit of the confidence interval = x-bar + width = 0.6 + 0.000784080483401535 = 0.60078408
The 95% confidence interval is [0.5992, 0.6008]
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