econ 140 4

# econ 140 4 - Economics 140 Professor Enrico Moretti Lecture...

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Economics 140 Professor Enrico Moretti 02/22/10 Lecture 4 ASUC Lecture Notes Online is the only authorized note-taking service at UC Berkeley. Do not share, copy or illegally distribute (electronically or otherwise) these notes. Our student-run program depends on your individual subscription for its continued existence. These notes are copyrighted by the University of California and are for your personal use only. D O N O T C O P Y Sharing or copying these notes is illegal and could end note taking for this course. ANNOUNCEMENTS Please turn in problem set 3 to your GSI. Problem set 4 is currently online. The midterm is on March 8 th during class. Everything we cover up till next Monday will be on the exam. No books or calculators during the midterm. No problem set will be assigned next week, but instead there will be a set of questions that you can use to practice for the exam. I will post the questions by the end of this week. Next week in section, the GSIs will work on these questions. Skip sections 7.4, 7.5, 9.4.2, and 9.4.3 in the textbook. LECTURE Today we will cover hypothesis testing, confidence intervals, and regression. Please look at chapter 8 and chapter 9. Interval estimation : Suppose that there is a population with an average income (or any other parameter), μ. We can estimate μ by taking the sample mean. Sample mean = x bar = (1/n)Σx i . The expected value of x bar will equal μ, this implies unbiasness. Today, we will try to estimate μ with an interval instead of a number. These types of intervals are called confidence intervals. The c onfidence interval for μ is a range such that μ lies in the range with probability 1- α, where α is the significance level. For example, the 95% confidence interval for μ is arranged in [a,b] so that the pr(a ≤μ≤b) = .95. Interval estimat ion conveys our intuition about the best guess for μ and how confident our guess of μ is.

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econ 140 4 - Economics 140 Professor Enrico Moretti Lecture...

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