STAT 301 Lecture Notes - Interval Estimation, Confidence Interval, Point Estimation

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27 Mar 2014
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Let be a fixed, but unknown parameter. Let be the point estimate for . We want to know what could possibly be. That is, we want an interval of plausible values for . Is an approximation of , but varies from sample to sample. However, we can use to create an interval of plausible values for : A confidence interval for a parameter is an interval of possible values for that parameter constructed so that, with a certain degree of confidence, the values of the parameter will be captured in the interval. The confidence level is the success rate of the method used to construct the confidence interval. 95% of the time, the true parameter value is within the error term from the point estimate. Point estimate = (critical value) > (standard error) Se depends on sampling distribution of the statistic (point est) Critical value depends on confidence level and sampling distribution.

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