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Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles.

Econometrics Introduction

A probability distribution is a table or an equation that shows each outcome of a statistical experiment with its likelihood, or probability, of occurring. For example, if you were to flip a coin twice there are four possible outcomes: Heads/Heads, Heads/Tails, Tails/Heads, Tails/Tails. This could be shown in a probability distribution table as follows: [b]# of Heads | Probability[/b] 0 | .25 1 | .50 2 | .25

Probability Distribution

[b]Discrete:[/b] A discrete random variable maps events to values of a countable set (e.g., the integers), with each value in the range having probability greater than or equal to zero. [b]Continuous:[/b] A continuous random variable maps events to values of an uncountable set (e.g., the real numbers). For a continuous random variable, the probability of any specific value is zero, whereas the probability of some infinite set of values (such as an interval of non-zero length) may be positive. [b]Mixed:[/b] A random variable can also be "mixed", with part of its probability spread out over an interval like a typical continuous variable, and part of it concentrated on particular values like a discrete variable.

Three Types of Random Variables

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Econometrics Flashcard Review

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