Chapter 5 Confidence Intervals

With the concept of the Central Limit Theorem (CLT) under our belts, we can discuss our first application of statistical inference. The main concept is that when a statistician discusses confidence, they are actually saying how likely something is going to happen. In other words, 95% confidence in a statement means that something is going to happen 95 out of 100 replications. We only get one shot (not 100 replications), so it is the likelihood that it’s going to happen in this one shot.

In order for us to get into statistical inference, we need to first have a refresher on probability. Thanks to the CLT, our probability calculations are going to come from the normal probability distribution.