Understanding Confidence Intervals
A confidence interval provides a range of values that likely contains the true population parameter. It helps quantify the uncertainty in sample estimates and is crucial for statistical inference.
Interpreting Confidence Levels
The confidence level represents the reliability of the interval:
- 95% Confidence: If we repeated the sampling process many times, about 95% of the intervals would contain the true population parameter.
- 90% Confidence: Narrower interval, but less confident that it contains the true value.
- 99% Confidence: Wider interval, but more confident that it contains the true value.
Z-scores vs. T-scores
The choice between Z-scores and T-scores depends on your sample size:
- Z-scores: Use when n ≥ 30 or when population standard deviation is known. Based on the normal distribution.
- T-scores: Use when n < 30 and population standard deviation is unknown. Accounts for additional uncertainty in small samples.
Formula and Calculation
The confidence interval is calculated as:
CI = x̄ ± (critical value × (s/√n))
Where:
- • x̄ is the sample mean
- • s is the sample standard deviation
- • n is the sample size
- • Critical value is from Z or T distribution
Example Calculation
For a sample with:
- • Mean = 75
- • Standard deviation = 8
- • Sample size = 36
- • 95% confidence level (Z = 1.96)
- • Margin of error = 1.96 × (8/√36) = 2.61
- • Confidence interval: 75 ± 2.61 = (72.39, 77.61)