Class notes
Weeks 1-3 Lecture Notes - Econometrics (ECB2METRIE)
- Course
- Institution
Econometrics (ECB2METRIE) Lecture notes of weeks 1-3
[Show more]
Seller
Follow
alexagth
Content preview
Econometrics Notes 2020-2021WEEK 1:
Econometrics = using data to measure causal effects.
Univariate analysis: summarizing one variable
Bivariate analysis: summarizing the relationship between 2 variables
Example of a Research question:
*Note: the alternative hypothesis is based on economic theory
What is the random variable and the population?
Numerically summarize the random variable: univariate analysis
Analyze the relationship between the random variable and another random variable: bivariate analysis and
regression analysis
Random variable X = a variable that takes on different values (these are denoted xi) with a given probability for each
outcome [Pr (X = xi)].
In our example, the r.v. is starting salaries of econ grads.
Discrete r.v.: countable outcomes
Continuous r.v.: non-countable outcomes
Population: set of all possible outcomes of X. We think of populations as infinitely large.
In our example, the population is all possible starting salaries of economics graduates
Probability density function (pdf) = function containing the probabilities of different outcomes,
denoted f (xi) = Pr(X = xi).
Discrete pdf: pdf for countable outcomes; (e.g. die rolls)
Continuous pdf: pdf for non-countable outcomes (e.g. hourly wage)
Univariate analysis: numerically summarizing the random variables population pdf
First moment of the pdf: expected value (mean) of X
Second moment of the pdf: variance of X
, Variance of the random variable X:
Var (X) = E(X2) - [ E(X) ]2
Bivariate analysis:
We now start considering the relationship between the random variable X and another random variable G:
X= starting salary of econ grads.
G=dummy variable for gender:
o G = 0 for male econ grad
o G = 1 for female econ grad.
To do this, we need the concepts of: joint, marginal and conditional distributions.
, Joint & marginal distribution
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller alexagth. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.36. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52510 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now