Can someone help me to understand the difference between the Margin Error and Confidence Interval?

I understand that when the confidence interval increases sample size will be smaller and when the margin error increases sample size required will be higher. But I am curious to know what is the difference and interpretation between these two when we are looking at statistically signifcant samples.

 

Thanks

Madhan

Madhan,

Normally in a process we consider margin at 5% with 95% confidence level. You have mentioned the statement , which is actually vice a versa. If we will increase the margin then sample size will decrease. The margin of error is the amount of error that you can tolerate. If 90% of respondents answer yes, while 10% answer no, you may be able to tolerate a larger amount of error.

Higher confidence level requires larger sample size. The confidence level is the amount of uncertainty you can tolerate. Suppose that you have 20 yes-no questions in your survey. With a confidence level of 95%, you would expect that for one of the questions (1 in 20), the percentage of people who answer yes would be more than the margin of error away from the true answer. The true answer is the percentage you would get if you exhaustively interviewed everyone.

In layman language, the process where margin of error can make a huge loss there we keep it very low. Because small margin of error can cause huge losses for example:- one plan crash can cost many lifes etc.

Hope this will clarify your doubts.

Thanks!

Sujeet Singh

You are right, I confused there.

Thanks for your time and the explanation. It is pretty clear now.

Regards

Madhan