What are the advantages of using interval estimation rather than point estimation?
The problem with using a point estimate is that although it is the single best guess you can make about the value of a population parameter, it is also usually wrong. Take a look at the sampling distribution of the mean on page 468 and note that in that case if you would have guessed $50,000 as the correct value (and this WAS the correct value in this case) you would be wrong most of the time. A major advantage of using interval estimation is that you provide a range of values with a known probability of capturing the population parameter (e.g., if you obtain from SPSS a 95% confidence interval you can claim to have 95% confidence that it will include the true population parameter. An interval estimate (i.e., confidence intervals) also help one to not be so confident that the population value is exactly equal to the point estimate. That is, it makes us more careful in how we interpret our data and helps keep us in proper perspective. Actually, perhaps the best thing of all to do is to
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