BUSS1020 Lecture Notes - Lecture 8: Confidence Interval, Interval Estimation, Point Estimation

• School: University of Sydney
• Department: Business Studies
• Course: BUSS1020
• Professor: Erick Li

Document Summary

A point estimate is a single number. A confidence interval provides additional information using the variability of the estimate. How much uncertainty is associated with a point estimate of a population parameter. An interval estimate provides more information about a population parameter than does a point estimate. In practice, you only take one sample of size n. In practice, you do not know , so you do nto know if the interval calculate dactually contains . However, we know that 95% of samples will give an interval that contains . Thus, based on one sample you actually select, you can be 95% confident that interval will contain . Out confidence that the interval will contain the unknown population parameter. Also written (1-a) = 0. 95, so a = 0. 05. A relative frequency interpretation: 95% of the confidence intervals that can be constructed will contain the unknown true parameter.