Examination of methods of analysis commonly used in economics and business. Emphasis on non-experimental and quasi-experimental designs necessitating the use of models. and large sample methods, case studies, surveys, regression and forecasting.

- tenacity
- authority
- intution
- science

**Scientific Method** - observe, develop a theory to explain, test - use new data to cross-check

**Random**(stochastic, non-deterministic) - value not known at start(non-stochastic, deterministic) - value is known**Non-random**

* Probability* - the chance that a random variable will take a certain value

- (distribution must add to 100%)

* Dependent*,

**Continuous*** distribution* (points on a continuous scale)

vs.

Discrete distribution

Subjective Distribution - have someidea of probalities of outcomes

Objective Distribution - based on # of times an outcome occurs divided by the total number of outcomes

* Correlation*- when two+ variables show a systematic patrern of movement

* *Correlation DOES NOT imply causation.*

** Canusaion implies correlation.*

* Regression* vs.

- same set of variables in different time periods**Time Series Data**- same set of variables at a point of time over different cross-sections**Cross Sectional Data**a - cross-section dataset over different time periods**Pooled Dat**

* Mean* - add all, divide by total #

* Median* - sum average/middle value of mean and mode

* Mode* - max probality, most frequent value of variable

* Standard deviation* - average deviation from the mean

* CV* (

**Measure of Associaion** - relationship between variables

1. positive, negative, none

2. covariance (cov) and correlation (p) - makes relative to variance

*Sometimes it is heapful to figure the prooduct of deviations and the sum of squared deviations

**Regression** - process of finding line or curve that "best" fits a given set of data points (F. Galton, 1886)

**OLS** linear regression - smalles sumof sqaure error for all points from the line/curve

- good for estimating what comes next

- good at average

**Multivariate** - plane of best fit (rather than a line)

1. structural or reduced forms

2. robustness or specification tests

3. intuition or hedonics

Two books mentioned in class concerning how we know:

**1. On being certain: believing you are right even when you're not by Robert Burton**

BD171 .B87 2009

Covering: the feeling of knowing, how do we know what we know?, classification of mental states and neural networks, when does a thought begin?, genes, perceptual and sensational thoughts, reason and objectivity, faith, etc.

**2. Thinking Fast and Slow by Daniel Kahneman**

BF441 .K238 2011

The author, a recipient of the Nobel Prize in Economic Sciences for his seminal work in psychology that challenged the rational model of judgment and decision making, has brought together many years of research and thinking. He explains two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical.