MODULE: Statistical Methods MODULE CODE: STAT1011 Module Map

Week Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11/12 Week 13 Week 14/15 Topic Introduction: Definition and Measurement, Nature of Statistical data, Characteristics of data , Data collection, Populations, Samples and Statistics Organization and Presentation of data Descriptive statistics: Measures of central tendency, average value and location Descriptive statistics: Measures of dispersion Measures of dispersion continued Index numbers Time series Time series Class Test and Assignments Probability theory Discrete distributions Continuous distributions Correction of Tutorials / Revision

MEASURES OF CENTRAL TENDENCY AND DISPERSION -Measures of Central Tendency: Calculation of mean, Geometric Mean, Harmonic Mean for both ungrouped data and ungrouped data. Calculation of Median, Lower Quartile and Upper Quartile. -Measures of Dispersion: Calculation of: Range Mean Deviation Semi-Interquartile Range 10-90 Percentile Range Standard Deviation Chebyshevs Theorem Coefficient of Variation -Moments, Skewness and Kurtosis: Calculation of Uncentered and Centered Moments Calculation of Pearson Definition of Skewness, Quantile Definition of Skewness and The Moment Definition of Skewness. Calculation of Coefficient of Kurtosis

INDEX NUMBERS Definition of Index Numbers Approaches to construct the index numbers: 1) Price Approach 2) Relative Index Approach- which is subdivide into: -Laspeyres (Base Weighting) -Paasches (Current Weighting) Importance of Weights Explain why there is a tendency to prefer base weighting to current weighting Discuss problems encountered with the construction of index in terms of: -Selection of items to be included -Selection of a suitable base period -The choice of appropriate weights measuring the relative importance of various items included in the index -The choice of a suitable average or index formula The Use of Index Numbers and its Limitations

TIME SERIES Two Methods of analyzing time series: -Moving-Average: By making use of Additive Model and Multiplicative Model -Exponential Smoothing PROBABILITY Introduction Types of events namely: -Mutually Exclusive events -Independent Events De-Morgans Rule Set Theory Axioms of Probability- proof by induction Solving of problems such as Birthday problems, Matching problems

PROBABILTY DISTRIBUTIONS AND PROBABILTY DENSITIES Discrete Random Variables: -Probability Distributions -Conditions that the probability distributions must satisfy -Distribution functions and the conditions that they must satisfy Continuous Random Variables: -Probability Density Functions -Conditions that the probability densities must satisfy -Distribution functions and the conditions that they must satisfy Multivariate Distributions: -Discrete Random Variables: Joint Probability distributions and the conditions that they need to satisfy Joint Distribution Functions and the conditions that they need to satisfy -Continuous Random Variables: Joint Probability Densities and the conditions that they need to satisfy Joint Distribution Functions and the conditions that they need to satisfy -For both the discrete and continuous cases, we take as explanation the bivariate distributions and densities respectively. -Marginal Distributions and Densities -Conditional Distributions and Densities

MATHEMATICAL EXPECTATION Expected value of a random variable Expected value of a joint probability distribution. Moments: -Uncentered Moments -Centered Moments Moment-Generating Functions Products Moments: -Uncentered Product Moments -Centered Product Moments Moments of Linear Combinations of Random Variables NB: The above are calculated for both discrete and continuous random variables. DISCRET E AND CONTINUOUS DISTRIBUTIONS Discrete Distributions: Bernoulli Distribution Uniform Distribution Binomial Distribution- should know the assumptions Negative Binomial Distribution- should know the assumptions Geometric Distribution- should know the assumptions Hyper-geometric Distribution- should know the assumptions Poisson Distribution- should know the assumptions Continuous Distributions: Normal Distribution Gamma Distribution Chi-square Distribution Exponential Distribution Beta Distribution

For all of the above distributions, we should know how to prove that: They are proper distribution-that is; summation (for discrete r.v.) or integral (for continuous r.v) over values is one Know their mean and variance and how to prove them

INFERENTIAL STATISTICS Estimation: Point Estimation Definition of point estimation, statistic, point estimator and point estimate Statistical Properties of an Estimator: Unbiasness Consistency Selection of Point Estimator: Bias Efficiency Mean-Square Error Methods to estimate parameters: Methods of Moments Maximum Likelihood Estimation Method Advantages and Disadvantages of the above two methods Estimation: Interval Estimation or Confidence Interval Definition How to construct a confidence interval for: Confidence Case Assumptions Distribution Interval for Mean 1 n 30, N(0,1) 2 is known 2 n 30, N(0,1) 2 is known 3 n< 30, tn-1 S2 is known 4 n < 30, tn-1 S2 is unknown Variance 1 S2 is known 2n-1 2 S2 is unknown 2n-1 Proportion 1 N(0,1)

Confidence Interval given by Xbar Z/2(/n) Xbar Z/2( hat/n) Xbar t /2,n-1 (/n) Xbar t /2,n-1 (hat/n) ((n-1) S2 )/( 2L/2 ),((n-1) S2 )/( 2U/2 ) ((n-1) S2hat)/( 2L/2 ), ((n-1) S2hat )/( 2U/2 ) Ps Z/2 (( Ps(1- Ps))/n)

Hypothesis Testing Elements of Hypothesis Testing: Defining the Hypothesis Testing Test Statistic Critical Region P-value Hypothesis Test Mean Case 1 2 3 4 Variance 1 Assumptions n 30, 2 is known n 30, 2 is known n< 30, 2 is known n < 30, 2 is unknown 2 is known Distribution N(0,1) N(0,1) tn-1 tn-1 2n-1 Test Statistical (Xbar )/ (/n) Xbar )/ (hat/n) (Xbar )/ (/n) (Xbar )/ (S/n) ((n-1)S2)/ 2

REGRESSION AND CORRELATION Regression Ordinary Least-Square Method Use OLS to derive 0 and 1 Assumptions of OLS Confidence Interval of 1 Correlation Scatter-plot - to show a positive, negative and no correlation Calculation and Interpretation of Correlation Coefficient in particular the Pearson Correlation Coefficient Factors causing Spurious Correlations: Lack of linear relationship between the variables Sample size Outliers Causation