1.Provide an example in which you would use a 90% confidence interval rather than a 99% confidence interval.
2.Explain one benefit to using a 90% confidence interval instead of a 99% confidence interval.
INSTRUCTIONS: APA Style , At least 3 references
- Example of using a 90% confidence interval:
In a scenario where a company is conducting a customer satisfaction survey, and they are under time pressure to present the results quickly to stakeholders, the company might choose to use a 90% confidence interval. The goal of the survey is to estimate the percentage of customers who are satisfied with their services. Given the urgency, the company may opt for the 90% confidence interval to make quicker decisions. This interval provides a faster estimate while still offering a reasonable level of certainty. Though the confidence level is slightly lower, the organization values the timeliness of the data over the more stringent accuracy provided by a 99% confidence interval.
- Benefit of using a 90% confidence interval:
One benefit of using a 90% confidence interval instead of a 99% confidence interval is that it results in a narrower interval. A narrower confidence interval provides a more precise estimate of the population parameter. This precision is especially important when stakeholders need actionable insights quickly, even at the cost of slightly lower confidence in the results. The narrower range also allows decision-makers to make more confident business or clinical decisions without waiting for more data or running longer analyses.
References
Frost, J. (2020). Confidence intervals vs prediction intervals: Understanding the differences. Statistics by Jim. https://statisticsbyjim.com/hypothesis-testing/confidence-intervals-vs-prediction-intervals/
Sullivan, L. (2018). Confidence Intervals. Boston University School of Public Health. https://sphweb.bumc.bu.edu/otlt/MPH-Modules/BS/BS704-Confidence-Intervals/BS704-Confidence-Intervals_print.html
Triola, M. F. (2018). Elementary statistics (13th ed.). Pearson.