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February 02, 2012
Testing
We start with the concepts of null and alternative hypotheses.
Story 1. "Where is theta?" is the general search for some statistical parameter theta.
Story 2. "Where is mu?" is the search for the expected value of a scalar random variable X. This story is popular in ECON 400.
Story 3. "Where is beta?" is the search for a regression coefficient. This story is very popular in ECON 570.
Story 4. The "Where is theta?" story can also be told in terms of a confidence interval. Students need to learn to apply this last story to the searches for mu and beta.
Posted by bparke at February 2, 2012 07:56 PM