Question

Question 2:

What is the difference between point estimation and interval estimation?

What is margin of error?

Why do we need margin of error in statistics?

Answer 1

2.i) Point estimation gives us a particular value as an estimate of the population parameter.

Interval estimation gives us a range of values which is likely to contain the population parameter. This interval is called a confidence interval.

ii) Margin of error : The margin of error is the range of values below and above the sample statistic in a confidence interval. The confidence interval is a way to show what the uncertainty is with a certain statistic (i.e. from a poll or survey). For example, a poll might state that there is a 98% confidence interval of 4.88 and 5.26. That means if the poll is repeated using the same techniques, 98% of the time the true population parameter (parameter vs. statistic) will fall within the interval estimates (i.e. 4.88 and 5.26) 98% of the time.

iii) Sample results vary from sample to sample, and this amount of variability needs to be reported (but it often isn’t). The statistic used to measure and report the level of precision in a study’s sample results is called the margin of error. In this context, the word error doesn’t mean a mistake was made; it just means that because you didn’t sample the entire population, a potential gap will exist between your results and the actual value you are trying to estimate for the population.