Estimating: point estimates and confidence intervals
A point estimate, such as the mean introduced in the measure of central tendency section, is a single value used to approximate an unknown population parameter. However, because sample data can vary, relying solely on a point estimate may overlook the uncertainty inherent in the estimation process. To address this, a confidence interval provides a range of plausible values for the population parameter, constructed from sample data and accompanied by a confidence level (e.g., 95%). This level reflects the probability that the interval contains the true parameter value across repeated sampling. Unlike a point estimate, which offers a single best guess, a confidence interval conveys both the estimate and the degree of uncertainty surrounding it.
A confidence interval consists of two parts:
- Point estimate: The central value of the interval.
- Margin of error: The range around the point estimate that accounts for...
