    Chapter 5: Analysing the Data Part II : Inferential Statistics # Confidence Intervals and Hypothesis Testing

Two basic uses of inferential statistics are possible:

a)interval estimation Ð so-called "confidence intervals"

b)point estimation Ð so-called "hypothesis testing"

Interval estimation ("Confidence Intervals") and point estimation ("Hypothesis Testing") are two different ways of expressing the same information.

Using Confidence Intervals we make statements like the following:

• the probability that the population mean (µ, or the 'true' value of the population mean) lies between 19 and 23 is 0.80;

• the probability that the population correlation value (r, or the 'true' value of the correlation between these two variables) lies between 0.20 and 0.24 is 0.60;

Using Hypothesis testing we say:

• the probability that our sample mean comes from a population with a mean of 21 is greater than 0.95

• the probability that our two sample means come from the one populations is less than 5% (i.e.,0.05).

• the probability that our sample comes from a population in which the true correlation is zero is 0.60.

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