Standard error and confidence intervals

Statistical Techniques in Tableau

Maarten Van den Broeck

Content Developer at DataCamp

The standard error (SE)

Estimating the true population mean from the sample mean.

  • Standard error of the mean: how much the sample mean and population mean deviate

  • $SE = \frac{SD}{\sqrt{n}}$    $SD$ = standard deviation          $n$ = sample size

  • Larger sample size means smaller SE

Statistical Techniques in Tableau

The confidence interval (CI)

"I'm 95 percent confident that the true population mean lies within the ranges of my confidence interval."

 

A 95% confidence interval of profit values.

  • When taking more samples, 95% of the confidence intervals will contain the true population mean
  • Sample $n = 30$
    • Sample mean $\overline{x}$ = 46.6
    • Lower bound = 25.9
    • Upper bound = 67.2
  • Population mean = 44.4
  • $CI = \overline{x} \pm level * SE$
  • $level = 1.96$ for 95% CI
Statistical Techniques in Tableau

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Statistical Techniques in Tableau

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