Applications of Confidence Intervals

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Applications of Confidence Intervals
In our daily operations, there are situations when estimation is a necessity especially when certainty cannot be determined. Normally, the values mentioned have a higher probability that to fall within the range specified. This illustrates the significance of confidence interval; therefore, a confidence interval can be described as a parameter in statistics used to describe an amount of uncertainty associated with a given sample estimation of a population.
When analyzing statistical results of a research study confidence interval is imperative in providing a report. In most cases when a research study is carried out it may involve a large population with a range of outcome on a particular variable, and in this case, it is only possible to average the result over a given interval. For example, after a research study on time spent on leisure activities of 2000 households, it is possible to estimate based on the results that an average of 3.56 hours to 5.91 hours is spent per day on leisure activities.
Similarly, in the situations when faced with an inquiry and it is not possible to provide an exact value it is possible to give a confidence level within which the value falls. For example, a situation when asked the speed at which I was driving, I would say that the speed averages between 25 to 40 miles per hour. The method can be useful for in many situations, for example, a businessperson can estimate the customers’ demands, when ordering for stocks, avoid overstocking or understocking.

There are statistics that a person ought to know, however, in most cases, people will fail to for example their weight. Such are the situations which lead to the practical use of confidence interval, within a specified probability. In most cases, a percentage of confidence is used to ascertain the range of values mentioned falls within the given interval i.e. 90% confidence level.