econometrics (Page 336)

# econometrics (Page 336)

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Pr (ˆ β2−δ≤β2≤ˆ β2+δ)=1−α (5.2.1) Such an interval, if it exists, is known as a confidence interval;1−αis known as the confidence coefficient;andα(0<α<1)is known as the level of significance. 2 The endpoints of the confidence interval are known as the confidence limits(also known as criticalvalues), ˆ β2−δ being the lower confidencelimitand ˆ β2+δ theupper confidencelimit. In passing, note that in practice αand1−αare often expressed in percentage forms as 100αand 100(1−α) percent. Equation (5.2.1) shows that an interval estimator, in contrast to a point estimator, is an interval constructed in such a manner that it has a specified probability 1−αof including within its limits the true value of the

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