Page 19 - Regression Guideline for AMC

Understanding regression mechanics
• Reflec6ng this imprecision, the es6mated value ($448,384) is actually a mid-­‐point within a range of possible values called the 95% confidence interval. In reality, the model is es6ma6ng that with a 95% degree of certainty, the true value of the property lies within this range. Five percent of the 6me, the true value will lie outside this range.
• The confidence interval along with the percentage of the 6me the value lies outside that interval reflect the probabilis6c nature of regression modeling as well as the level of uncertainty with which we are willing to live.
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