To do this, we use what we know about the sampling distribution of xˉ1−xˉ2 and, in particular, its estimated standard deviation (the standard error). Recall from In-Class Activity 12.D that you learned that the difference in the sample means, xˉ1−xˉ2, also has an approximately normal distribution, centered at the difference of the population means, μ1−μ2. The standard deviation is given by the following formula:
√n1/σ12+n2/σ22
In practice, we will have to estimate the standard deviation because it depends on the unknown population standard deviations. Replacing σ1 and σ2 by the sample standard deviations s1 and s2, we get the standard error of the difference: standard error of xˉ1/−xˉ2=√n1/s1²+n2/s2²