Confidence level and Significance level – The confidence level or reliability is the expected percentage of times that the actual value will fall within the stated precision limits. Thus, if we take a confidence level of 95%, then we mean that there arc 95 chances in 100 (or .95 in 1) that the sample results represent the true condition of the population within a specified precision range against 5 chances in 100 (or .05 in 1) that it does not. Precision is the range within which the answer may vary and still be acceptable; confidence level indicates the likelihood that the answer will fall within that range, and the significance level indicates the likelihood that the answer will fall outside that range. We can always remember that if the confidence level is 95%, then the significance level will be (100 — 95) i.e., 5%:, if the confidence level is 99%, the significance level is (100 — 99) i.e., 1%, and so on. We should also remember that the area of normal curve within precision limits for the specified confidence level constitutes the acceptance region and the area of the curve outside these limits in either direction constitutes the rejection regions.
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