Introduction to Econometrics
Professor Woodbury
Fall Semester 2015
Experiments and Basic Statistics
1. The probability framework for statistical
inference
2. Estimation
3. Hypothesis testing
4. Confidence intervals
Y=1
Y=2
Y=3
Y=4
Y=5
Y=6
Probability
f(yi)
0.167
0.167
0.167
0.167
0.167
0.167
Y1
Y2
Y3
Y4
Y5
Y6
Cumulative
probability
F(yi)
0.167
0.333
0.50
0.667
0.833
1.0
Key
Concept
2.1
For a discrete
random
variable (one
that takes on a finite or
discrete set of values, like the outcome of rolling a die 1, 2, 3, 4,
5, 6):
2-3
Moments (continued)
variance = E(Y Y)2
2
= Y
10
2-4
11
Exercise
Let Y be the number of heads that occur when two coins are
tossed.
a. What is the probability density function of Y?
b. What is the cumulative distribution of Y?
c. What are the mean, variance, and standard deviation of Y?
12
Y=0
Y=1
Y=2
Probability
f(yi)
0.25
0.50
0.25
Y0
Y1
Y2
Cumulative
probability F(yi)
0.25
0.75
1.0
13
14
APPENDICES
[B.6]
726
15