ACE 264

covariance

A measure of linear association between two variables. Positive values indicate a positive relationship; negative values indicate a negative relationship

estimation

Y as an estimate of u

variance

a difference between what is expected and what actually occurs -standard deviation squared

discrete variable

a quantitative variable that has either a finite number of possible values or a countable number of possible values -can only take certain values

correlation coefficient

a statistical index of the relationship between two things (from -1 to +1)

What does sigma do?

adds values up (sigma = sum)

continuous variable

can take on any value on the measurement scale e.g. IQ, height

t statistic

indicates the distance of a sample mean from a population mean in terms of the estimated standard error

conditional mean

mean of conditional distribution

population distribution of y =

probability that certain values or ranges will occur

random variable

takes numerical values that describe the outcomes of some chance process

conditional distribution

the distribution of a variable restricting the who to consider only a smaller group of individuals

variance definition

the variance is roughly the average of the squared differences between each observation and the mean

we assume anything we observe is a random sample from the population distribution

true

independently distributed

value of variable 1 gives no info for variable 2