BUSINESS ADMINISTRATION
BUSINESS ANALYTICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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prediction interval
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confidence interval
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interval estimation
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regression
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Detailed explanation-1: -The prediction interval predicts in what range a future individual observation will fall, while a confidence interval shows the likely range of values associated with some statistical parameter of the data, such as the population mean.
Detailed explanation-2: -In linear regression statistics, a prediction interval defines a range of values within which a response is likely to fall given a specified value of a predictor. Linear regressed data are by definition non-normally distributed.
Detailed explanation-3: -A prediction interval is a range of values that is likely to contain the value of a single new observation given specified settings of the predictors. For example, for a 95% prediction interval of [5 10], you can be 95% confident that the next new observation will fall within this range.
Detailed explanation-4: -1) Mean prediction – study a confidence interval around the OLS estimate of E(y│x1, …, xk), for instance, for the average hourly wage. 2) Individual prediction-study a confidence interval of the hourly wage for a particular person.