What is the Continuity Correction Factor?

A continuity correction factor is used when you use a continuous probability distribution to
approximate a discrete probability distribution. For example, when you want to use the
normal to approximate a binomial.

According to the Central Limit Theorem, the sample mean of a distribution becomes
approximately normal if the sample size is “large enough.” for example, the binomial
distribution can be approximated with a normal distribution as long as n*p and n*q are both
at least 5. Here,

 n = how many items are in your sample,

 p = probability of an event (e.g. 60%),
 q = probability the event doesn’t happen (100% – p).

The continuity correction factor accounts for the fact that a normal distribution is continuous,
and a binomial is not. When you use a normal distribution to approximate a binomial
distribution, you’re going to have to use a continuity correction factor. It’s as simple as
adding or subtracting .5 to the discrete x-value: use the following table to decide whether
to add or subtract.

Continuity Correction Factor Table

If P(X=n) use P(n – 0.5 < X < n + 0.5)
If P(X > n) use P(X > n + 0.5)
If P(X ≤ n) use P(X < n + 0.5)
If P (X < n) use P(X < n – 0.5)
If P(X ≥ n) use P(X > n – 0.5)

Let’s make the table a bit more concrete by using x = 6 as an example. The column on the left
shows what you’re looking for (e.g. the probability that x = 6), while the right-hand column
shows what happens to 6 after the continuity correction factor has been applied.
Continuity Correction Factor Example
The following example shows a worked problem where you’ll actually use the continuity
correction factor to solve a probability problem using the z-table.

Sample problem: If n = 20 and p = .25, what is the probability that X ≥ 8?

Step 1: Figure out if your sample size is “large enough”. Start by working out n*p and
n*q:
np = 20 * .25 = 5 (note: this is also the mean x̄)
nq = 20 * .75 = 15
These are both over 5, so we can use the continuity correction factor.

Step 2: Find the variance of the binomial distribution:

n*p*q = 20 * .25 * .75 = 3.75
Set this number aside for a moment. You’ll use this value in Step 4 to find a z-score.

Step 3: Use the continuity correction factor on the X value. For this example, we have a
greater than or equals sign (≥), so the table tells us:
P(X ≥ n) use P(X > n – 0.5)
X ≥ 8 becomes X ≥ 7.5.

Step 4: Find the z-score. You’ll need all three values from above:

 The mean (x̄) from Step 1,

 The variance (s) from Step 2,
 The Xi value from Step 3.

z = 7.5 – 5 / √3.75 = 1.29

Step 5: Look up Step 4 in the z-table.

1.29 = .4015.
Step 6: Subtract Step from .5 to get the area (we are looking for the right tail in the above
image):
.5 – .4015 = 0.0985.
The probability that X ≥ 8 is 0.0985.

Why is the continuity correction factor used?

While the normal distribution is continuous (it includes all real numbers), the binomial
distribution can only take integers. The small correction is an allowance for the fact that
you’re using a continuous distribution.

A normal distribution curve.

Source :

https://www.statisticshowto.datasciencecentral.com/what-is-the-continuity-correction-factor/