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Continuity Correction

In using the normal approximation to the binomial probability histogram, one can get more accurate answers by finding the area under the normal curve corresponding to half-integers, transformed to standard units. This is clearest if we are seeking the chance of a particular number of successes. For example, suppose we seek to approximate the chance of 10 successes in 25 independent trials, each with probability p = 40% of success. The number of successes in this scenario has a binomial distribution with parameters n = 25 and p = 40%. The expected number of successes is np = 10, and the standard error is (np(1−p))½ = 6½ = 2.45. If we consider the area under the normal curve at the point 10 successes, transformed to standard units, we get zero: the area under a point is always zero. We get a better approximation by considering 10 successes to be the range from 9 1/2 to 10 1/2 successes. The only possible number of successes between 9 1/2 and 10 1/2 is 10, so this is exactly right for the binomial distribution. Because the normal curve is continuous and a binomial random variable is discrete, we need to "smear out" the binomial probability over an appropriate range. The lower endpoint of the range, 9 1/2 successes, is (9.5 − 10)/2.45 = −0.20 standard units. The upper endpoint of the range, 10 1/2 successes, is (10.5 − 10)/2.45 = +0.20 standard units. The area under the normal curve between −0.20 and +0.20 is about 15.8%. The true binomial probability is 25C10×(0.4)10×(0.6)15 = 16%. In a similar way, if we seek the normal approximation to the probability that a binomial random variable is in the range from i successes to k successes, inclusive, we should find the area under the normal curve from i−1/2 to k+1/2 successes, transformed to standard units. If we seek the probability of more than i successes and fewer than k successes, we should find the area under the normal curve corresponding to the range i+1/2 to k−1/2 successes, transformed to standard units. If we seek the probability of more than i but no more than k successes, we should find the area under the normal curve corresponding to the range i+1/2 to k+1/2 successes, transformed to standard units. If we seek the probability of at least i but fewer than k successes, we should find the area under the normal curve corresponding to the range i−1/2 to k−1/2 successes, transformed to standard units. Including or excluding the half-integer ranges at the ends of the interval in this manner is called the continuity correction.

Permanent link Continuity Correction - Creation date 2021-08-07


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