What are confidence intervals and how are they used in various fields?

What are confidence intervals and how are they used in various fields?

Confidence intervals are a range of values used to estimate the true parameter of a population. They are widely used in fields like statistics, medicine, and social sciences to express the uncertainty around a sample estimate.

Can you give me an example of how confidence intervals are used in medicine?

Sure! In clinical trials, confidence intervals help researchers determine the effectiveness of a new drug by estimating the range within which the true effect size lies, based on sample data.

What about in business analytics?

In business analytics, confidence intervals can be used to assess the reliability of forecasts, such as sales predictions, helping businesses make informed decisions based on the estimated range of potential outcomes.

Are there any limitations to using confidence intervals?

Yes, confidence intervals can be misleading if the sample size is too small or if the data is not normally distributed. It's important to consider these factors when interpreting them.