8. Predictions

Question 1

How do we find a point prediction?

Answer 1

Sub in the values for the the variables and work out y

Question 2

What is a good way of quantifying the precision of a prediction

Answer 2

To construct an interval prediction or a confidence interval for the prediction

Question 3

What does a 95% confidence interval define?

Answer 3

The range of true values of the predicted variable (given MLR 1-6 hold) that is consistent with the prediction at 95% confidence

Question 4

How many standard deviations either side covers 95% of the range of values

Answer 4

Value + or - 1.96 standard deviations

Question 5

How many standard deviations either side covers 99% of the range of values

Answer 5

Value + or - 2.58 standard errors

Question 6

How do we obtain the standard error of a prediction?

Answer 6

We turn the prediction into a parameter of the model. We generate new variables eg age-30 if the person we are predicting is 30 and then we are given the standard errors of our dependent variable