Basic Probability & Random Variables

Axioms of Probability

Conditional Probability

Multiplicative Rule of Probability

Bayes Rule is very important

Here is a useful application of Bayes

Randomization Response Theory Assume that you need estimate the proportion of narcotic drug consumption among university students. It is unlikely that students would answer your questionnaire honestly. So here is a simple trick you may use. Instead of asking the question directly, let the student draw a ball from an urn in which there are 8 blue and 2 yellow balls. If a yellow ball is drawn (you do not see the result), student answers the question «Is the last digit of your TC ID number odd?» and if a blue ball is drawn then the student answers «Have you ever used a narcotic drug?» question.

Soon we will be able to compute the error due to …(?)

Random Variables and Probability Distributions Random Variable:? Example: When rolling a two dice, we may be interested in whether or not the sum of the two dice is 7. Or we might be interested in the sum of the two dice.

Probability Density Function In class: How probabilities are related with areas under the curve.

Expectation

Variance

Typically you need to know what sort of probability distributions are there and for which type of situations thay are used for. We will be mostly dealing with Normal Distribution.

INCOME DISTRIBUTION – (Empirical)

INCOME DISTRIBUTION – (Theoretical) Log Normal Didtribution

Normal Distribution x     z Standard Normal Distribution

P(x < 500) = P(z < 1) Normal Distribution 600μ =500 P(x < 600) μ = 500 σ = 100 x Standard Normal Distribution 1μ = 0 μ = 0 σ = 1 z P(z < 1) Same Area

Sampling Probability Sampling Nonprobability Sampling

Probability Sampling Sampling element Population Target population Sampling frame Sampling ratio

There is a classic Jimmy Stewart movie, Magic Town, about "Grandview," a small town in the Midwest that is a perfect statistical microcosm of the United States, a place where the citizens' opinions match perfectly with Gallup polls of the entire nation. A pollster (Jimmy Stewart), secretly uses surveys from this "mathematical miracle" as a shortcut to predicting public opinion. Instead of collecting a national sample, he can more quickly and cheaply collect surveys from this single small town. The character played by Jane Wyman, a newspaper editor, finds out what is going on and publishes her discovery. As a result the national media descend upon the town, which becomes, overnight, "the public opinion capital of the U.S."

Probability Sampling

Check POPULATION PARAMETERSSAMPLE STATISTICS To be filled in class

Sampling Distribution

Probability Sampling Random sample Sampling error Four Ways to Sample Randomly – Simple Random – Systematic – Stratified Sampling – Cluster Sampling

Random Sample Sampling Error: Variation Component Sample size Component

Sampling Distribution and Sampling Error

Sampling and Confidence x