ECON 221 Lecture Notes - Lecture 3: Statistical Inference, Descriptive Statistics, Decision-Making

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Introduction: the world is afloat of data. Interpret data to enable us to make better decisions in the face of an uncertain environment. Decision making under uncertainty: there is a daily need for decisions. A correct decision would require taking into account all available information with respect to a specific subject: however, complete a priori knowledge of all conditions is impossible to have. Econ 221: introduction to statistical methods i newbold 8th edition. Randomness: the world in which the future occurs is not deterministic, as there is also a great deal of randomness (chance) that prevails in everything. Examples: coin tossing, die rolling, daily change in stock index, number of admissions to the emergency room in a hospital. It is the piece of information (value) that will be collected (occur) in a given moment. It is any of the possible outcomes (where not all outcomes will occur at the same time).

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