Econometrics For Dummies

Chapter 3

Making Inferences and Testing Hypotheses

In This Chapter

Utilizing sample data and estimating descriptive measures

Understanding sampling distributions and the central limit theorem

Reviewing the characteristics of common probability distributions

Using probability distributions for interval estimation and hypothesis testing

One goal of both statistics and econometrics is to develop concepts that can be used to make predictions and forecasts with data. As a student, you typically use surveys and other forms of sample data to test your hypotheses and draw conclusions, and to do so, you need to understand how statistical inference works.

Statistical inference and hypothesis testing focus on the process of making generalizations for a population from sample information. Although econometrics courses cover inference procedures, you need to understand the foundational concepts covered in this chapter to fully grasp and appreciate those techniques.

This chapter reviews characteristics of well-known probability distributions and some fundamental concepts of statistical inference. ...