## Confidence Intervals For Beta_0, beta_1 Assignment Help* *

**Introduction**

In statistics, a confidence interval (CI) is a type of interval estimate of a population parameter. It is an observed interval (i.e., it is calculated from the observations), in principle different from sample to sample, that frequently includes the value of an unobservable parameter of interest if the experiment is repeated.

How frequently the observed interval contains the parameter is determined by the confidence level or confidence coefficient. More specifically, the meaning of the term "confidence level" is that, if CI are constructed across many separate data analyses of replicated (and possibly different) experiments, the proportion of such intervals that contain the true value of the parameter will match the given confidence level Whereas two-sided confidence limits form a confidence interval, their one-sided counterparts are referred to as lower/upper confidence bounds (or limits).

Confidence intervals consist of a range of values (interval) that act as good estimates of the unknown population parameter; however, the interval computed from a particular sample does not necessarily include the true value of the parameter. When we say, "we are 99% confident that the true value of the parameter is in our confidence interval", we express that 99% of the hypothetically observed confidence intervals will hold the true value of the parameter. After any particular sample is taken, the population parameter is either in the interval, realized or not; it is not a matter of chance. The desired level of confidence is set by the researcher (not determined by data). If a corresponding hypothesis test is performed, the confidence level is the complement of respective level Confidence Interval Data Requirements

**To express a confidence interval, you need three pieces of information.**

- Confidence level
- Statistic
- Margin of error

Given these inputs, the range of the confidence interval is defined by the sample statistic + margin of error. And the uncertainty associated with the confidence interval is specified by the confidence level. The selection of a confidence level for an interval determines the probability that the confidence interval produced will contain the true parameter value. Common choices for the confidence level Care 0.90, 0.95, and 0.99. These levels correspond to percentages of the area of the normal density curve. For example, a 95% confidence interval covers 95% of the normal curve -- the probability of observing a value outside of this area is less than 0.05. Because the normal curve is symmetric, half of the area is in the left tail of the curve, and the other half of the area is in the right tail of the curve. As shown in the diagram to the right, for a confidence interval with level C, the area in each tail of the curve is equal to (1-C)/2. For a 95% confidence interval, the area in each tail is equal to 0.05/2 = 0.025.

Strictly speaking a 95% confidence interval means that if we were to take 100 different samples and compute a 95% confidence interval for each sample, then approximately 95 of the 100 confidence intervals will contain the true mean value (μ). In practice, however, we select one random sample and generate one confidence interval, which may or may not contain the true mean. Suppose we want to generate a 95% confidence interval estimate for an unknown population mean. This means that there is a 95% probability that the confidence interval will contain the true population mean. Thus, P( [sample mean] - margin of error < μ < [sample mean] + margin of error) = 0.95.

The Central Limit Theorem introduced in the module on Probability stated that, for large samples, the distribution of the sample means is approximately normally distributed with a mean: Suppose we wish to estimate the mean systolic blood pressure, body mass index, total cholesterol level or white blood cell count in a single target population. We select a sample and compute descriptive statistics including the sample size (n), the sample mean, and the sample standard deviation (s). The formulas for confidence intervals for the population mean depend on the sample size and are given below.

It is natural to interpret a 95% confidence interval as an interval with a 0.95 probability of containing the population mean. However, the proper interpretation is not that simple. One problem is that the computation of a confidence interval does not take into account any other information you might have about the value of the population mean. For example, if numerous prior studies had all found sample means above 110, it would not make sense to conclude that there is a 0.95 probability that the population mean is between 72.85 and 107.15.

What about situations in which there is no prior information about the value of the population mean? Even here the interpretation is complex. The problem is that there can be more than one procedure that produces intervals that contain the population parameter 95% of the time. Which procedure produces the "true" 95% confidence interval? Although the various methods are equal from a purely mathematical point of view, the standard method of computing confidence intervals has two desirable properties:

When you compute a confidence interval on the mean, you compute the mean of a sample in order to estimate the mean of the population. Clearly, if you already knew the population mean, there would be no need for a confidence interval. However, to explain how confidence intervals are constructed, we are going to work backwards and begin by assuming characteristics of the population. Then we will show how sample data can be used to construct a confidence interval.