Data collecon to evaluate the senators claim a random

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Unformatted text preview: a$on –  Normal distribu$on, binomial distribu$on –  Moment genera$ng func$on –  Law of large number, central limit theorem –  Etc. Calculus will also be used •  •  Linear algebra is not required Previous exposure to sta$s$cal compu$ng is not required •  Stat 431 5 Example: Revenue Neutral Tax Bill •  •  Problem setup: –  A senator proposes a new tax bill to simplify the tax code –  The senator claims that the changes are revenue neutral: On balance, tax revenues will not change. Data collec$on: –  To evaluate the senator’s claim, a random sample of 100 tax returns is selected; They are recomputed, using the proposed rule changes –  Results: average change in sample =  ­$219, sample SD = $725 Adapted from Freedman, Pisani, Purves, and Adhikari, Sta3s3cs, 2nd Ed. Stat 431 6 Key Concept: Popula$on vs. Sample •  Popula$on / sample –  Unit: a single en$ty whose characteris$cs are of interest (tax return form) –  Popula$on: the complete collec$on of units about which info is sought...
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