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What Is the Margin of Error?
Estimation is the process by which sample data are used to indicate the value of an unknown
quantity in a population.
Results of estimation can be expressed as a single value, known as a point estimate; or a range of
values, referred to as a confidence interval.
Whenever we use point estimation, we calculate the margin of error associated with that point
estimate. For example, for the estimation of the population proportion, by the means of sample
proportion (p), the margin of error is calculated
often
as follows:
±1.96 [p(1p)/n]
1/2
In newspapers and television reports on public opinion polls, the margin of error often appears in
a
small font
at the bottom of a table or screen. However, reporting the amount of error only, is
not informative enough by itself, what is missing is the
degree of the confidence
in the findings.
The more important missing piece of information is the sample size n; that is, how many people
participated in the survey, 100 or 100000? By now, you know well that the larger the sample size
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This note was uploaded on 10/04/2011 for the course ECO 6416 taught by Professor Staff during the Spring '08 term at University of Central Florida.
 Spring '08
 Staff

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