Econ103_spring11_lec2c

Econ103_spring11_lec2c - ECON 103, Lecture 2: Review of...

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ECON 103, Lecture 2: Review of Statistics I Maria Casanova March 31 (version 1) Maria Casanova Lecture 2
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Requirements for this lecture: Chapter 3 of Stock and Watson Maria Casanova Lecture 2
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Outline Steps of empirical analysis Definitions - population, random sampling Estimation Unbiased estimator Consistent estimator Central Limit Theorem Case study Maria Casanova Lecture 2
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1. Introduction Steps of empirical analysis: 1 Formulate the question of interest 2 Obtain data 3 Estimate the parameter(s) of interest 4 Conduct statistical inference Maria Casanova Lecture 2
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1. Introduction Steps of empirical analysis: 1 Formulate the question of interest Example: What is the average wage for US workers? 2 Obtain data 3 Estimate the parameter(s) of interest 4 Conduct statistical inference Maria Casanova Lecture 2
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2. Random sampling Steps of empirical analysis: 1 Formulate the question of interest 2 Obtain data 3 Estimate the parameter(s) of interest 4 Conduct statistical inference Maria Casanova Lecture 2
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2. Random sampling Population : group of interest, e.g. all working adults in the US. Y : random variable of interest, e.g. yearly wage. Population Distribution of Y : describes how Y varies (or is distributed) across the population. Typically we do not observe the whole population, only a subset of it, a sample . Maria Casanova Lecture 2
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2. Random sampling Random Sample : values of Y for a set of n randomly chosen adults from the population. Random Sampling : the process of picking up those n random units from the population. Each individual of the population gets to be part of the sample with the same probability. ( Y 1 , ..., Y n ) is a random sample of size n . Y i and Y j represent two observations in the sample, which are themselves random variables. Maria Casanova Lecture 2
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2. Random sampling When a sample is random, 2 conditions are fulfilled: Y i and Y j are independent. This means that knowing the value of
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Econ103_spring11_lec2c - ECON 103, Lecture 2: Review of...

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