Two geometric representations of confidence intervals for ratios of linear combinations of regression parameters: An application to the NAIRU (original) (raw)

Although the Fieller Method for the construction of confidence intervals for ratios of normally distributed random variables has been shown to be a superior method to the delta method it is infrequently used. We feel that researchers do not have an intuition as to how the Fieller Method operates and how to interpret the non-finite intervals that it may produce. In this note we present two simple geometric representations of the Fieller interval and demonstrate how they can be used to interpret the estimation of the NAIRU.