Lecture_2_Prof_Arkonac's_slides_(Ch_2)

# Lecture_2_Prof_Arkonac's_slides_(Ch_2) - Introduction to...

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Introduction to Econometrics W3412, Fall 2010 Lecture 2 Prof: Seyhan Arkonac, PhD

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Stata sessions: Thursday 9/23, 11-11:50am, SCH 558 (Naihobe) Thursday 9/23, 12-12:50pm, SCH 558 (Ran) Thursday 9/23, 4:10-6pm, SCH 558 (WooRam) Friday 9/24, 2:10-3pm, SCH 558 (Ju Hyun) Every week starting 9/24 11-1150am SCH 558 (Shreya)
What is a Random Variable? Gender of the next newborn baby Number of times your computer will crash while you are writing a term paper Number of times your wallet is stolen during four years of college Age of next 10 th customer at a store Gender of the next 20 th caller Eye color of the next Lottery winner

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A Random Variable is a numerical summary of a random outcome Let M be the number of times your computer will crash while writing a paper Then M may take values from 0 to say 4 (This is an example to a Discrete random Variable) why? What is an example of a continuous RV?
Continuous Random Variable examples: Height of people Weight of people Amount of money people earn Continuous RV takes on a continuum of possible values (once measured and recorded it will become discrete)

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Probability Distribution of a discrete RV is the list of all possible values of the variable and the probability that the each value will occur Cumulative Probability distribution: is the probability that the RV is ≤ a particular value See the following computer crash example:
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Probability Distribution of a continuous RV is not suitable for continuous RV, instead the probability is summarized by probability density function (pdf) Cumulative Probability distribution: is the probability that the RV is ≤ a particular value (same as in discrete RV case) See the following commuting times example:

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Now let’s go back to the relationship between class size and educational output : Empirical problem: Class size and educational output Policy question: What is the effect on test scores

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## This note was uploaded on 11/10/2011 for the course ECON 3142 taught by Professor Arkonac during the Spring '11 term at Columbia.

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Lecture_2_Prof_Arkonac's_slides_(Ch_2) - Introduction to...

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