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Spring 2010 Final Exam Review Slides

# Spring 2010 Final Exam Review Slides - Econ 203 Final...

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L U S H A Z H U S p r i n g 2 0 1 0 Econ 203 Final Review

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Statistical Inference Basic Idea: use sample data to make an inference about population parameters Two possible errors: Type I: reject a true null hypothesis Type II: fail to reject a false hypothesis 1 - Prob(Type I error) = significant level / confidence level /
4 Step Method 1. Identify the hypotheses 1. Distributions, Number of tails, Hypothesized means, etc. 2. Calculate test statistic 3. Find Critical Value / p-value 4. Make your decision: 1. critical value vs. test stat 2. P value vs. significance level Alternative: Using confidence interval Point estimate contains in CI ?

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Decision tree One population: Mean Proportion Variance Two populations: Mean Proportion Variance Three or more populations: mean
Which test do you use? 1. Find number of populations 2. Find parameter of interest 1. Look for key words Eliminate variance and proportion, anything else is average 3. Test specific cases

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One population average Case 1: population variance known z test Case 2: population variance unknown t test n-1 degrees of freedom
One population proportion Always a z test Use p, hypothesized value, in denominator of test statistic, not Sometimes need to find or find n(sample size) using

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One population variance Key words: variability, volatility, fluctuation, risk, consistency, etc Use Chi-Squared n-1 degrees of freedom Centered around n-1 Not symmetric: different critical values for upper and lower confidence intervals
2 population average Dependent or Independent samples Dependent samples use the same person, machine, rat, etc

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