Interval Estimates

Interval Estimate:

• Interval estimation is the process of calculate the interval for possible value of unknown parameter in the population.
• It is calculate in the use of sample data and contrast to the point estimation. It is different from the point estimation. It is the outcome of a statistical analysis.

The most common forms of interval estimations as follows:

• A frequents Method or Confidence interval
• A Bayesian method or credible intervals

The other common methods for interval estimations are

• Tolerance interval
• Prediction interval

And another one is known as the fiducial inference.

Construction of interval estimates parameter:

The normal form of interval estimate of the population parameter is,

• Point estimate of parameter and
• Plus or minus margin of error

Margin of error:

• The amount which is subtracted or added from  the point estimate  of the statistic and produce the parameter interval  estimate is known as the margin of error.
• The margin of error size depends on the following factors:
• Sampling distribution type of sample statistics.
• Area under sampling distribution percentage   that includes the researchers      decision.Usually we consider the confident level as 90%, 95%, 99%.
• The interval of each interval estimates are constructed in the region of the point estimate with its confident level.

My forthcoming post is on Set Interval Notation will give you more understanding about Algebra.

Construction of Interval estimate for Population mean

• Take the point estimate of μ  that is  the sample mean`vecx`
• Define  the mean distribution for the sample.When the  value of n is large we  have to use the central limit  theorem. And   is the normal distribution with the,

                      standard deviation `sigma``vecx` = `sigma/sqrt(n)`  

                      and mean μ.

• Choose the most common confident  level as 95%
• Find the margin of  error  which is related with the confidence level.
• The area  under the curve of  the sample means the normal distribution contains the 95%  of the interval from.

                               z= -1.96 to z= 1.96 

• The interval estimate for 95 % is,   

                            `vecx`- 1.96 (`sigma/sqrt(n)` ) to `vecx``sigma/sqrt(n)`