One of the central problems of statistics is that we try to use samples to describe or make conclusions about populations. Sometimes this is called making inferences about the populaton or making estimates of population parameters. This always involves uncertainty because there are many possible samples of any population. Some of those samples will produce really excellent estimates of the population statistics, but other samples will provide terrible estimates. This is not because the researcher made an error, it is just a result of the fact that a sample is used. Fortunately, if we use random sampling we know that most samples will be pretty good. Unfortunately, we never know whether we have one of the pretty good samples or one of the pretty bad ones. We also know for sure that it would be extremely unlikely that a sample statistic would be exactly equal to the population parameter (even with rounded numbers). Therefore it is almost always better to make an estimate that is an interval (the estimated mean is between 8.2 and 9.4) than an estimate that is a single point (the estimated mean is 8.8). The single point gives a false impression of precision to an estimate that already has uncertainty.

Confidence Intervals

One way that statisticians have developed to deal with the uncertainty associated with using sample statistics to estimate unknown population parameters is the concept of a confidence interval. Unfortunately, as with many other words such as random and normal, statisticians use the term confidence in ways that do not necessarily match the way people use them in ordinary English.

A confidence interval lets us give a range of estimated values of the parameter instead of a single value and lets us associate a level of confidence (or uncertainty) with that estimate. The level of confidence is based on how often the procedures we use to create the interval will actually work at including the actual value in the population (assuming that a list of assumptions are met) if we took a huge number of samples. The level of confidence is a probability, so it has to be between 0 and 1, though this is often converted to a percent when presented.

If we were guess of a population parameter, such as the mean age or temperature, using a range of values, we would be more likely to be right if our range is bigger. For example, we would be more confident that the population parameter is between 20 and 25 than that it is between 22 and 23. This is just a truism. Of course, it could be that our guess is still completely wrong and that the mean age is 32 or 16. Similarly, the wider the confidence interval, the more likely it is that the true value of the population parameter is somewhere inside it. That is, higher confidence levels are associated with wider intervals. Ultimately, the probability that the parameter is in a given interval is either 1 (it is) or 0 (it is not), but in the practical world of research we will never know this.

We express this confidence as a percentage, but it is important not to get confused and think that the percentage is the chance that the true parameter value is in the interval. The percentage more accurately reflects our estimate of the percent of the time that creating a confidence interval from a random sample of a given size will contain the true population value if we took every possible sample of the same size as our sample.

Sampling Distributions

Confidence intervals are based on the idea of a sampling distribution. In a sampling distribution instead of having data on people or countries, we have data about samples. Specifically, for a given statistic, such as the mean, median, proportion or variance, we have the sample value for every possible sample of a given size (n).

How many possible samples are there? A lot. If we had 10 people in a population and just tried to list out every possible way to select them into groups of 10, assuming we could pick the same person multiple times and that we count each sample that is selected in a different order separately, we would have (10)(10)(10)(10)(10)(10)(10)(10)(10)(10) or 10,000,000,000 or $1*10^{10}$ posssible samples. And it just gets bigger as the population size increases or the sample size increases. Many results in statistics actually depend on the idea of an infinite population.

Just like any distribution for an interval variable, the sampling distribution has its own mean, median, variance and standard deviation. The standard deviation of a sampling distribution is called the standard error. The standard error of a sampling distribution is related to the distribution of the original variable. In the case of the mean, the standard error of the sampling distribution is a function of the standard deviation of the original variable and the square root of the sample size.

A sampling distribution also, of course, has quantiles, like the 25th percentile, the 90th percentile and the 99th percentile. Unfortunately since the reason we are estimating from a sample to start with is that we don't really know about the population, we also don't know exactly what the sampling distribution is, though, fortunately, when random sampling is used this does follow some rules that can be proved mathematically. Unfortunately, those rules also require information about the population.

That means that when we calculate a confidence interval we are still relying on our one sample for all of our information about the population.

Constructing Confidence Intervals

As with many other things, statisticans do not all think alike, and this is especially true when it comes to the question of how best to construct a confidence interval from a sample. As beginning students it is good for you to see the two main ways this is done.

The validity of both methods relies on the assumption of random sampling.

Let's take a random sample of 30 states from our population of 50 states as an example. Of course we would never do this in real life.

#Set the seed. This ensures that everytime this document is generated we get the same sample. The seed was generated using runif(1, 1, 1000).
our_sample <- sample_n(poverty.states, 30)

Now let's look at the mean, median and standard devation of PCTPOVALL_2013 in our sample.


We will construct confidence intervals around these estimates.

Bootstrap or Resampling Methods

These methods leverage the fact that any sample you select actually represents many possible samples from the sampling distribution. For example you can rearrange the order of the sample members and each would be a unique permutation. Also you can treat your sample as though it was a population and take many possible samples from it that are the same size, but that allow the same observation to be selected more than once (sampling with replacement). That is how a sample of size 10 actually represents 10,000,000,000 samples. In our case we have $30^{30}$ possible samples which would be $2 * 10^{44}$ samples or 2 followed by 44 zeros. Creating bootstrap confidence intervals involves taking a number of these possible samples and using them to create an artificial sampling distribution and using that to create the interval. In our example we will take 10,000 samples.

The next code block illustrates how this is done in R. However to really understand it, it is a good idea to look at a visualization such as that available at (Statkey)[] At the end of this document the 30 values used here are listed so that you can try them in Statkey.

# This example takes 10000 samples and calculates a 95% Confidence Interval (the default)
# for the mean.
result1A <- bootstrap(our_sample, mean(PCTPOVALL_2013, na.rm = TRUE), R = 10000)

Notice that each confidence interval gives you two values, one labelled 2.5% and one labelled 97.5%.
97.5 - 2.5 = 95 which is where the 95% comes from. The 97.5 and 2.5 refer to the percentiles of the sampling distribution. The difference between the two values is like the Interquartile Range, but instead of being the middle 50% of the distribution it represents the middle 95% of the distribution, in this case the middle 95% of a sampling distribution.

Suppose we wanted a 98% confidence interval. The middle 98% are between the 1st percentile and the 99th percentile (99 - 1 = 98). We would get our confidence interval for the same analysis by specifying those percentiles instead of the default.

CI.bca(result1A, probs = c(0.01, 0.99))

Notice that this interval is wider. To have more confidence for the same sample, the interval has to get wider.

If we wanted to be similar to the IQR we could use a 50% confidence interval.

CI.bca(result1A, probs = c(0.25, 0.75))

Notice that this is narrower.
We can use bootstraping to construct a confidence interval for any statistic. In this document we are going to stay with univariate statistics and estimate intervals for the median and standard deviation.

# This example takes 10000 samples and calculates a 95% Confidence Interval (the default)
# for the median.
result2 <- bootstrap(our_sample, median(PCTPOVALL_2013, na.rm = TRUE), R = 10000)

# This example takes 10000 samples and calculates a 95% Confidence Interval
# for the standard deviation.
result3 <- bootstrap(our_sample, sd(PCTPOVALL_2013, na.rm = TRUE),
                     R = 10000  )

Notice that with a bootstrap estimation you will get different values every time you do it. This is because you are taking new random samples each time. Even though we are using different samples, they should be similar most of the time if our sample is reasonable large.

result4 <- bootstrap(our_sample, sd(PCTPOVALL_2013, na.rm = TRUE),
                     R = 10000  )

Remember that the sampling error for a variance, standard deviation or IQR is not an estimate of actual variation, it is an estimate of how much such estimates would vary if there were repeated samplng.

If you would like to use this sample in Statkey to better understand bootstrapping, copy the column below. Be sure to indicate that the first column is labels.


Parametric and Other Non-Bootstrap Methods

In most parametric methods the standard error is estimated using some assumptions, such as that the original variable is normally distributed. One of the most commonly used ways of estimating a confidence interval is using the percentiles of the t distribution which relies on this assumption as well as the assumption that the standard deviation in our sample is accurate. The code below shows how to calculate confidence intervals for the mean using the t distribution in R.

ci1 <- t.test(our_sample$PCTPOVALL_2013, conf.level = 0.90)

ci2 <- t.test(our_sample$PCTPOVALL_2013, conf.level = 0.95)

ci3 <- t.test(our_sample$PCTPOVALL_2013, conf.level = 0.98)

Notice that as before, as we make the confidence level higher, the confidence interval gets wider. Unlike the bootstrap method, you would only calculate it once since the result for a given sample would never change. (because you are using the t distribution instead of resampling your sample).

Unfortunately, parametric confidence intervals for the median, variance and standard deviation are not as simple, so we won't go into them here since the boostrap methods are available.

We can also use a t test for the confidence interval for regression estimates of the intercept and coefficient.

our_sample$MEDHHINC_2013 <- replaceCommas(our_sample$MEDHHINC_2013) 
reg1 <- lm(PCTPOVALL_2013 ~  MEDHHINC_2013, data = our_sample)

Displaying confidence intervals.

Often, we want to display confidence intervals around our estimates. This can be an excellent way of communicating the uncertainty of estimates. It can make the comparison of different groups or units more clear. For example, although the Census Bureau provides a level of poverty for each state, that level itself is based on the sampling used in the American Community Survey. Therefore the Census Bureau provides 90% confidence intervals for the estimate in each state. We can display these to help readers understand that the measures are just that, measurements, that are not perfect representations of the underlying reality in this case due to the inherent uncertainty that comes along with using even a very well designed probability sample.

    aes(x= reorder(Area_Name, PCTPOVALL_2013), y = PCTPOVALL_2013)) +
  geom_errorbar(aes(ymin = CI90LBALLP_2013, ymax = CI90UBALLP_2013),
    width=.2, position=position_dodge(.9)) +
  labs(y = "Percent in Poverty",     x="State") +
  # This line is going to rotate the state names by 90 degrees. You can try other values.
  theme(axis.text.x = element_text(angle = 90, vjust = 0.5, hjust=1)) +
  ggtitle("Fig #2:  Percent Poverty By state with 90% Confidence Intervals")

This display illustrates some important points. First, confidence intervals displayed in this way can help us see that while the means from the states are all different, many of them are in the same general range and their confidence intervals overlap. On the other hand, some states that seem very different from the others, specifically New Hampshire and Mississippi, remain different even when we use interval estimation. Their whole intervals are separate from those of other states.

Second, clearly some confidence intervals are wider than others, and the widths vary a lot. This is because confidence intervals are based on the standard error, which depends on the standard deviation and square root of the sample size. So some states with bigger confidence intervals may have smaller samples but some may have more variability.

Displaying Confidence Intervals in Regression

Another place you can see a kind of confidence interval is when ggplot puts a confidence ribbon around the least squares line or other smoother. The ribbon for OLS regression is actually showing the confidence interval for each value of y based on the estimated equation of the line. You can see from the graph that the intervals are wider as you get further from the two means. This is one reason we should be cautious about extending beyond the edges of our data.

           y=PCTPOVALL_2013)) +
  geom_point() +
  stat_smooth(method = lm) +
  ggtitle("Fig # 1: Poverty Rate and Median Income (for States)") +
  labs(x = "Median Income",  
       y="Percent of population in poverty") 


It is important to keep in mind that confidence intervals are for describing the range of values that we estimate for a parameter using observed data from a sample. If we were making predictions about new values of $y$ for a new observation of $x$ the intervals would be wider. This would be called a prediction interval. Bayesian statisticians create credibility intervals which also are different in terms of the underlying assumptions. If you read an article with intervals it is important to pay attention to which kind of interval it is.

Statisticians have a number of debates about the place of confidence intervals and how they shoulld be interpreted. Nonetheless, there is general agreement that it is better to make estimates that are intervals rather than specific points, since point estimates imply more certainty than there really is.

The most important thing to remember is what a confidence interval does not do. It does not make it possible to say that there is a certain probability that the true value is within the confidence interval. It only allows you to say that if you performed the procedure repeatedly over many separate random sample that you would expect the interval to include the true value that percent of the time.

SOC345/lehmansociology documentation built on May 9, 2019, 11:41 a.m.