ECON206_1011_01_Handout_02[1]

# ECON206_1011_01_Handout_02[1] - ECON 206 METU Department of...

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ECON 206 October 11, 2010 METU- Department of Economics Instructor: H. Ozan ERUYGUR e-mail: [email protected] 1 LECTURE 02 SAMPLING DISTRIBUTIONS AND CENTRAL LIMIT THEOREM Outline of today’s lecture: I. Uniform Distribution Functions in Excel . .......................................................................... 1 A. RAND Function (Continuous Uniform Distribution) . .................................................. 3 B. RANDBETWEEN Function (Discrete Uniform Distribution) . .................................... 4 II. Simulating the Sampling Distribution of a Mean. ............................................................. 5 III. The Central Limit Theorem (CLT) . ................................................................................. 7 I. Uniform Distribution Functions in Excel The Uniform distribution assigns an equal probability to all events. In Bayesian probability theory the uniform distribution represents ignorance in the sense that the all events are assumed to be equally probable. For example, if a fair die is thrown, the probability of obtaining any one of the six possible outcomes is 1/6. Since all outcomes are equally probable, the distribution is uniform. Continuous Uniform Distribution The form of the continuous uniform distribution function is given by: 1 () 0 f X if a X b and elsewhere ba =≤

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ECON 206 October 11, 2010 METU- Department of Economics Instructor: H. Ozan ERUYGUR e-mail: [email protected] 2 where a is the minimum value of X and b is the maximum value. The expected value and variance of the continuous uniform distribution are: 2 2 () , 21 2 ba ab EX Va rX μσ + == = = The shape of the uniform density function is: Probability Density Function Continuous Uniform Distribution Discrete Uniform Distribution The outcome space of X is the set of all integers x such that aXb
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## This note was uploaded on 03/22/2012 for the course ECON 106 taught by Professor Kücüksenel during the Spring '12 term at Middle East Technical University.

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ECON206_1011_01_Handout_02[1] - ECON 206 METU Department of...

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