Estimation and Confidence

Limits

Estimation & Confidence limits

There are many situations where it is difficult or
even impossible to find an exact answer but it is possible
to make estimates. In fact, it is often possible to make
very good estimates, estimates that are good enough for
any purpose, no matter how good the estimate must be. If
we can make arbitrarily good estimates then that is
sufficient for any practical purpose.
Estimation and confidence limits are also an
important part of the assessment of error and are
determined based on how much variability there is in the
data and how sure or unsure one is of the value obtained
from the sample.

It is possible to use your sample to calculate a

range within which the population value is likely to fall.
Hence, there exist confidence interval. The values at each
end of the interval are called the confidence limits. All
the values between the confidence limits make up the
confidence interval. One can use interval and limits
almost interchangeably.
The confidence interval is the likely range of the
true value. Confidence limits, which are the simplest and
best way to understand generalization in statistics.

Interpretation of limits
The lower and upper confidence
limits need to be interpreted
separately. The lower limit shows
how small the effect might be in
the population; the upper limit
shows how large the effect might
be. Well never know whether it
really is that small or big unless
you go out and measure the whole
population.
The confidence limits example on
the right are not spaced equally on
each side of the observed value

Estimation and Confidence limits

Here's a figure showing
how the width of the
confidence
interval
depends on the number of
subjects, for a correlation
coefficient. It's the sort of
thing you would get if you
took bigger and bigger
samples
from
a
population.

Calculating limits on statistics

To calculate confidence limits for a statistic, a
statistical program works out the variation between subjects,
then estimates how that variation would translate into
variation in your statistic, if you kept taking samples and
measuring the statistic. When you tack that variation onto the
value of your sample statistic, you end up with the confidence
interval. Usually, one computes either the 95 percent or 99
percent confidence limits. These limits indicate respectively
the range of values within which one has either 95 percent or
99 percent confidence that the true value of a population
statistic will lie, based on the estimate from the sample.