A Prediction Interval, Yh, for a given new observation, Xh, is an interval estimate of the response variable.
A frequently asked question is the difference between a confidence interval and a prediction interval for the dependent variable, Y, in a regression equation. The confidence interval estimates the mean of the distribution of Y, and the prediction interval estimate an individual outcome selected from the distribution of Y.
Let's begin with an example and learn how to compute the prediction interval.
Regression Tutorial Menu Dictionary