Permanent Income Hypothesis Introduction The basic idea is that people’s income has a random element to it and also a known element to it and that people try to smooth the random part using saving and borrowing. Hence‚ we need to distinguish between permanent income and transitory income. Example: Suppose that you are working and receive an annual salary of twenty thousand dollar. Suppose that you expect to get that salary every year in the future. Then twenty thousand dollar represents the
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Chapter 8: Hypothesis Testing: 8.1 Review and Preview: The two main activities of inferential statistics are using sample data to (1) estimate a population parameter (such as estimating a population parameter with a confidence interval)‚ and (2) test a hypothesis or claim about a population parameter. Hypothesis: a claim or statement about a property of a population Hypothesis test/test of significance: a procedure for testing a claim about a property of a population Population proportion
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One Sample Hypothesis Test Jeremey Yoppini‚ Mayela Castillo‚ Kristopher Olstad‚ Areli Mejia‚ Heather Smith RES342 December 21‚ 2011 Thomas Allen One Sample Hypothesis Test Earning potential and income of every person is severely different; many factors have a hand in determining the amount of money a person makes and how much his or her earning potential can increase. Some of the factors currently determining the earning potential of people around the United States are; education‚ marital
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Tutorial Note 5 • Chapter 17 Hypothesis Testing • Chapter 18 Measures of Association Objective: Computer laboratory session (II) – Please refer to the Computer Lab Notes Discussion Question 1 H0 – Null Hypothesis: a statement you want to reject (E.g Average = 50) H1/HA – Alternative Hypothesis: a statement you want to prove (E.g Average is not 50) What is related/dependent sample? H0: Tutorial is NOT effective H1: Tutorial is effective |Respondent |Before
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samples of size n are selected from each of k populations. It will be assumed that the k populations are independent and normally distributed with means [pic][pic] and common variance [pic]. We wish to derive appropriate methods for testing the hypothesis: [pic] [pic] [pic] at least two of the means are not equal. Table 1 K random samples | |Population | | |
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Stock Market Prices Do Not Follow Random Walks: Evidence from a Simple Specification Test Andrew W. Lo A. Craig MacKinlay University of Pennsylvania In this article we test the random walk hypothesis for weekly stock market returns by comparing variance estimators derived from data sampled at different frequencies. The random walk model is strongly rejected for the entire sample period (19621985) and for all subperiod for a variety of aggregate returns indexes and size-sorted portofolios. Although
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Fundamentals of Hypothesis-Testing Methodology Hypothesis testing typically begins with a theory‚ a claim‚ or an assertion about a particular parameter of a population. Some of them are: • The Null and Alternative Hypotheses The hypothesis that the population parameter is equal to the company specification is referred to as the null hypothesis. A null hypothesis is often one of status quo and is identified by the symbol H0. Whenever a null hypothesis is specified‚ an alternative hypothesis is also
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Hypothesis testing using the binomial distribution Chapter assessment 1. Sweets called “Scruffies” are sold in packets of 18. Scruffies come in a variety of colours‚ and market research shows that red is the most popular. Scruffies are packed randomly‚ and on average 25% are red. (i) Find the probability that a packet contains no more than 6 red Scruffies. [2] (ii) Find the probability that a packet contains exactly 4 red Scruffies. [2] Because of a fault in the packing machine
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as shown in the ClassPak. The statement in parentheses refers to the Alternative Hypothesis for each. 5. On average IU students go out 2.5 nights or more per week. (The alternative hypothesis is that IU students go out less than 2.5 times per week.) Ho: μNights >= 2.5 Ha: μNights < 2.5 6. On average IU students drink exactly 5 1/2 drinks in an average night out. (The alternative hypothesis is that IU students do not drink 5 1/2 drinks per night out.) Ho: μDrinks
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Elements of a Test of Hypothesis 1. Null Hypothesis (H0 ) - A statement about the values of population parameters which we accept until proven false. 2. Alternative or Research Hypothesis (Ha )- A statement that contradicts the null hypothesis. It represents researcher’s claim about the population parameters. This will be accepted only when data provides sufficient evidence to establish its truth. 3. Test Statistic - A sample statistic (often a formula) that is used to decide whether to reject H0
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