4.5.3 - Interpreting the CI

In the graph below, we show 10 replications (for each replication, we sample 30 students and ask them whether they are Democrats) and compute an 80% Confidence Interval each time. We are lucky in this set of 10 replications and get exactly 8 out of 10 intervals that contain the parameter. Due to the small number of replications (only 10), it is quite possible that we get 9 out of 10 or 7 out of 10 that contain the true parameter. On the other hand, if we try it 10,000 (a large number of) times, the percentage that contains the true proportions will be very close to 80%.

1 2 3 4 5 6 7 8 9 10  true proportion

If we repeatedly draw random samples of size n from the population where the proportion of success in the population is \(p\) and calculate the confidence interval each time, we would expect that \(100(1 - \alpha)\%\) of the intervals would contain the true parameter, \(p\).