Question

What does a confidence interval tell us and how do we calculate one? As part of your answer, please come up with an example.

Answer 1

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Answer:

A confidence interval is how much uncertainty there is with any particular calculated test statistic. They are often used with a margin of error. Confidence interval tells you with how much confidence you can be certain the results from a poll or survey reflect what you would expect to find if it were possible to survey the entire population.

Example: One survey of the number of people in poverty in 1995 stated a confidence level of 90% for the statistics “The number of people in poverty in the United States is12,543,742 to 15,986,654.” That means if the Census Bureau repeated the survey using the same techniques, 90 percent of the time the results would fall between 12,543,742 toand 15,986,654people in poverty. The stated figure (12,543,742to 15,986,654) is the confidence interval.

When the population standard deviation is known, the formula for a confidence interval (CI) for a population mean is

deviation, n is the sample size, and z* represents the appropriate z*-value from the standard normal distribution for your desired confidence level.