These confidence intervals (CI) are ranges of values that are likely to contain the corresponding conditional mean responses.
Because samples are random, two samples from a population are unlikely to yield identical confidence intervals. But, if you sample many times, a certain percentage of the resulting confidence intervals contain the unknown population parameter. The percentage of these confidence intervals that contain the parameter is the confidence level of the interval.
The confidence interval is composed of the following two parts:
- Point estimate
- The point estimate is the estimate of the parameter that is calculated from the sample data. The confidence interval is centered around this value.
- Margin of error
- The margin of error defines the width of the confidence interval and is determined by the observed variability in the sample, the sample size, and the confidence level. To calculate the upper limit of the confidence interval, the error margin is added to the point estimate. To calculate the lower limit of the confidence interval, the error margin is subtracted from the point estimate.
Use the confidence intervals to evaluate whether the conditional mean responses are statistically larger than, equal to, or less than a specific value. You can also use the confidence intervals to determine a range of values for the corresponding unknown conditional mean responses.