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LOS 7.i: Calculate and interpret a confidence interval
for the predicted value of the dependent variable. MODULE 7.4: PREDICTING DEPENDENT VARIABLES & CONFIDENCE INTERVALS
CONFIDENCE INTERVALS FOR PREDICTED VALUES
Confidence intervals for the predicted value of a dependent variable are calculated in a manner similar to the confidence interval
for the regression coefficients. The equation for the confidence interval for a predicted value of Y is:
The challenge with computing a confidence interval for a predicted value is calculating s (this is normally provided in the exams
f
but if you have to compute it, you use this formula for the variance of the forecast):
