321_09_slides4

321_09_slides4 - Week 2 Review Econ 321 Introduction to...

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Week 2 Review Econ 321 Introduction to Econometrics Econ 321-Stéphanie Lluis 1
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Outline Review of steps in statistical analysis: CLT Hypothesis testing Confidence Intervals Covariance/Correlation Simple regression Econ 321-Stéphanie Lluis 2
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Confidence Intervals We want to know how likely it is that the population parameter lies within a “reasonable” interval of the value of our estimated parameter (based on sample info) A 95% confidence interval for the mean for a population which follows a N( ,1) is such that: Where Y 1 , . ..Y N is a random sample and is the sample mean. 1.96 is the 97.5 th in the N(0,1) distribution
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Econ 321-Stéphanie Lluis 4
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Based on Previous Example Construct a confidence interval for the change in scrap rate from 1987 to 1988 With n=20, a 95% conf. int. for the mean change in scrap rates is: [y ± 2.093*se(y)] 2.093 is the 97.5 th percentile in a t 19 distribution [-2.28, -0.02] Since the value 0 is not in the interval, with 95% confidence the average change in scrap rate is not 0
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Further Analysis: Moving on to Multidimensional analysis Layoff from a corporation in which 35% of the employees are age 40 or older. Of the 100 employees who are laid off, 45% are age 40 or older. a hypothesis test indicates that this is unlikely to have occurred by
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This note was uploaded on 07/11/2011 for the course ECON 321 taught by Professor Louis during the Fall '09 term at Waterloo.

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321_09_slides4 - Week 2 Review Econ 321 Introduction to...

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