9_1_11_inference - Standard deviation or variance CE4001...

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CE4001 Transportation Safety 1 Standard deviation or variance?
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CE4001 Transportation Safety 2 Standard deviation or variance? Standard deviation has the units of the original measurement. e.g. mph versus mph 2
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CE4001 Transportation Safety 3 How to look at magnitudes? Is $1 difference important?
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CE4001 Transportation Safety 4 How to look at magnitudes? Is $1 difference important? Buying a new car, versus cost of gas per gallon
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CE4001 Transportation Safety 5 Coefficient of variation Sometimes, helpful to look at % deviations and compute standard deviation of % deviation. i.e. standard deviation divided by the mean e.g. New car $1/$20,000, very small, e.g. Cost of gas $1/$3 = 0.33, very significant
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CE4130 Transportation Safety 6 Statistical Inference
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CE4001 Transportation Safety 7 Why Inference? If we could measure population parameters directly, why obtain a sample of the population and estimate sample statistics? E.g. if we wanted to know how many miles people drive/commute per day/wk/yr, why not ask everyone directly?
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CE4001 Transportation Safety 8 Reason for Using Inference For example, we ask people about their income, family/marriage status, employment, etc… for the U.S. census. Cost/effort of U.S. census for 2000, 281M people, $4.5 Billion or $16/person. Accessibility – remote areas, e.g. rural parts of Appalachia; unwillingness;
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CE4001 Transportation Safety 9 Sampling distribution of the sample mean How close is the sample mean to the population mean? Or the variance?
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CE4001 Transportation Safety 10 Example of the importance of the sampling distribution Due to recent support of alternative fuels, an oil co. wants to find out whether inclusion of ethanol-blended fuel actually helps to improve sales. Company will only continue to include this fuel if mean daily sales are at least 18,000 gallons per station. A random sample of 100 stations produced mean sales of 18,200 gallons. Should the oil co. continue w/ new blend? (Will return to this e.g. later.)
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CE4001 Transportation Safety 11 Using multiple dies to illustrate sampling distribution Roll 2 dies 20 times.
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This note was uploaded on 10/26/2011 for the course ECON 101 taught by Professor Dr.siam during the Spring '11 term at American University of Kuwait.

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9_1_11_inference - Standard deviation or variance CE4001...

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