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Confidence Level and Confidence Interval

# Confidence Level and Confidence Interval

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Researchers' Corner in J-gate Newsletter, Volume 3 Issue 10 October 2011.
Researchers' Corner in J-gate Newsletter, Volume 3 Issue 10 October 2011.

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12/21/2012

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Researchers’ Corner

Confidence Level and Confidence Interval
A novice researcher is often confused with terms like confidence level and confidence interval if notalready exposed to the background. Further, there are terms like significance level, p-
value, α
-value,margin of error and so on found in research papers as well as while sampling and testing of data. Two
concepts very fundamental to all these are ‘precision’ and ‘reliability’ of statistical predictions.
In day-to-day life, we encounter plenty of predictions and guess works by all sorts of people ranging fromprofessional astrologers to renowned futurologists. For example, who will win an election or a cricketmatch, whether it will rain or not on a particular day, etc. are quite common. Are these predictionsscientifically based? Do they have enough precision and reliability to confidently accept and act? How to judge their precision and significance? etc., are some natural questions any rationally thinking personwould ask. Let us look from a lay-m
an’s angle what these two attributes of predictions, namely precision
and reliability mean and try to understand them with the simple example. Suppose a teacher asks four ofhis students to predict how much marks (out of 100) they would score in the foregone examination beforethe results are announced and their predictionsare shown in the table. Column 2 of the tablerecords prediction of each student. Students arealso asked to judge the chance of predictionbecoming true and the same in percentage isshown in column 4.All predictions in the table except that of student
`A’ falls in a range of marks. It is quite natural
that the chances of prediction becoming truewill increase with the increase in the range of prediction. On the other hand, a binary prediction like true/ false or pass/ fail as well as the pin-
pointed prediction like that of student `A’ certainly will have lower
chances of coming true than predictions leading to a range. The prediction of student B is very liberal inthe sense he may score marks ranging from 0 to 89 and hence chances of this happening is as high as
99.9 percent. The prediction of student `C ‘ is challenging as he sets lower limit of not less than 70 marks
and the chances of becoming true is reasonably high (95%). Lastly
, the prediction of student `D’ is veryreasonable in terms of range and the chances of becoming true are very high. Thus predictions of `C ‘and `D’ are quite meaningful in terms of precise range of prediction coupled with high chances of
occurring.The range within which the expected/ predicted value falls is called the
precision’
of prediction and thechances of predicted value falling in the range is called the
reliability’
of prediction. The reliability isStudent PredictedmarksRange ofPredictionThe chances (in %)that the predictioncomes true1 2 3 4A 75 0 50.0B <90 0 - 89 99.9C >70 71 - 100 95D 70±5 65 - 75 98
Volume 3 Issue 10 October 2011

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