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ApEc 8212
Econometric Analysis
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Lecture #1
Conditional Expectations and Related Concepts
I. Introductory Remarks
There are four main uses of econometrics and statistics:
1.
To measure the characteristics of interesting
economic variables (for example, the degree of
income inequality), and the correlations between
different variables of interest (for example, the
correlation in the returns to two investments).
2.
To test the validity of economic theories.
3.
To quantify the magnitudes (and direction) of
economic relationships and parameters.
4.
To forecast/predict future values of variables.
Work on the 2
nd
and 3
rd
(and maybe the 4
th
) tasks soon
leads to attempts to measure
causal
relationships.
To
avoid confusion, researchers must be very careful, and
very explicit, when they analyze data. You should start
simple and then go on to more complicated problems.
2
3
II. Conditional Expectations in Econometrics
:
]
x
.
.
,
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- Spring '14
- Glewwe,PaulW
- Probability theory, Conditional expectation, conditional expectations, E
