# Confidence Interval: Definition, Formula & Example

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• 0:03 Making Estimations
• 0:29 What Is a Confidence Interval?
• 1:47 Calculating CI Mean
• 2:56 Real World Example
• 3:59 Calculating CI Proportion
• 4:48 Real World Example
• 5:54 Lesson Summary
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Lesson Transcript
Instructor: Eric Keith

Dr. Keith holds a PhD in Criminology and has instructed adult and collegiate learners in theory, research, and application of the social sciences.

When calculating the mean or proportion for a population, using samples and confidence intervals can make the calculation more manageable. Learn more about this process in this lesson.

## Making Estimations

How much will your next pay raise be? Perhaps $3,000 or$5,000? Hmm, it's extremely difficult to estimate an exact number. You would have more success if you estimated your raise within a range of numbers. Meaning, if you were to say that your next pay raise would be between $1,000 and$10,000, you would be more confident in your estimate. This is essentially how confidence intervals work.

## What Is a Confidence Interval?

A confidence interval (CI) refers to the amount of uncertainty associated with a sample population estimate (the mean or proportion) of a true population. Say you wanted to determine the average age of victims of robberies in Chicago last year. Now, while there is a true answer, say 30 years old, the best you can do is find an interval that the true answer probably lies in, say, 20-40 years old.

The confidence interval is the sample mean or proportion plus or minus the margin of error (ME), which is the value used to calculate the upper limit and lower limit of the sample statistic. In this case, the upper limit is 40, and the lower limit is 20.

Before calculating the CI from a sample mean or proportion, choose either a 90%, 95%, or 99% confidence level (CL). This is the amount of uncertainty in the sampling method, meaning each time the same sampling method is used, the true population value would be represented in 90%, 95%, or 99% of all the sample estimated CIs. That also means that 10%, or 5%, or 1% would not contain the true population score.

## Calculating CI Mean

Let's see how to calculate a confidence interval using the mean:

1. Identify a population, select a representative sample, and note the number of the sample (n).

2. Calculate the mean by adding all of the sample values and divide by n.

3. Select the CL (typically 95%) and locate the corresponding t (z value), which is 1.96 for 95% CI. (You can find tables of pre-calculated z values for various confidence levels and use them as a resource).

4. Calculate the standard deviations by subtracting each value in your sample from the mean, then square each result. Then calculate the mean of all of those squared differences. This is known as the variance.

5. Take the square root of the variance.

6. Calculate the CI with this formula:

Note that n uses the degrees of freedom, which is n - 1.

Finally, write out your CI mean ± the margin of error. The CI is between the upper limit (the sample mean plus the margin of error) and lower limit (the sample mean minus the margin of error).

## Real World Example

Let's return to our earlier example. What is the average age of robbery victims in Chicago last year?

1. Randomly sample 100 police reports of Chicago robberies last year. So, n = 100.

2. Record the ages of the victims, add them all up all, and divide by 100 to get the mean. Let's say the mean age in this case is 34.25 years.

3. Utilizing a 95% CL, which has a standard z value of 1.96, calculate the standard deviation. With a mean of 34.25 and a standard deviation of 10, a margin of error of 8 is calculated with the CI formula.

4. Your CI is 34.35 ± 8, or 26.35 to 42.35.

You can now say with 95% confidence, that if the true average age of all Chicago robbery victims last year was known, it would fall between 26.35 and 42.35 years of age.

## Calculating CI Proportion

When you're faced with a population measured by categorical data (for example, gender), you can calculate the CI using a proportion with the following steps and formula:

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