econometrics terms/formulas
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| 256433116 | quadratic function formula | x = -b +- SR (b^2-4ac) ------------------- 2a | |
| 256433117 | negative value | profit max under 2nd order condition | |
| 256433118 | declining balance method | annual depreciation (Rn) =d.Bn-1 Book value (Bn) =c(1-d)^N note c=initial value, N=years, d=dep. rate | |
| 256433119 | straight line method | annual depreciation (Rn) = C-Sa -------- N note C-initial value, Sa=salvage value, N=years | |
| 256433120 | target saving | amount needed to be saved = r.FV ------------ (1+r)^n -1 note r=interest rate, FV=future value, n=years | |
| 256433121 | perpetuity | amount totalled = R((1+r)^n-1) ---------------- r note R=periodic payment, r=interest rate, n=years | |
| 256433122 | effective interest rate | solve for 'x' where: (1+r/c)^c-1 = (1+x/y)^y-1 c= no yearly interest payments r=rate of interest y=desired no yearly interest payments | |
| 256516888 | class relative frequency | class frequency ___________________ total no. of observations | |
| 256516889 | variance | Σ(fm^2) - [(Σfm)^2/n] --------------------------------- n - 1 where f=frequency, m=midpoint of class interval | |
| 256516890 | standard deviation | Square root of variance | |
| 256516891 | conditional probability | P(I|G) = P(I and G) -------------- P(G) | |
| 256523187 | intersection | P(AnB) | |
| 256523188 | union | P(AuB) A or B | |
| 256523189 | dependent intersection | P(AnB) = P(A) x P(B|A) | |
| 256523190 | independent intersection | P(AnB) = P(A) x P(B) | |
| 256523191 | z values | z = x-u ----- o' | |
| 256523192 | varied sample size | z = (x-u) ----------- (σ/SR(n)) | |
| 256538240 | confidance interval | ά | |
| 256538241 | degrees of freedom | n-1 | |
| 256538242 | critical value | T(ά/2) AND n-1 | |
| 256538243 | confidance interval estimator | =x±t_(∝/2) S/√n | |
| 256538244 | simple linear regression model | =b_0+b_1 x | |
| 256538245 | least square regression model | B_1 = ΣXY - [(ΣX x ΣY)/n] ----------------------------------------- ΣX^2 - [(ΣX)^2/n] B_0 = SumY/n-B_1 x (SumX/n) | |
| 256538246 | hypothesis testing | (1) Hypothesis (2) Critical Value (3) Test statistic (4) Decision rule (5) Conclusion | |
| 256538247 | critical value | -find confidance interval ά -determine if two tail (ie no alternatives) -degrees of freedom (n-2) -use t-table with (t_ά/2, n-2) | |
| 256538248 | test statistic | t = ^b^_1 - b_1 --------------- S_b1 note b_1=0, S_b1 is given, find ^b^_1 before | |
| 256538249 | decision rule | if |t_test statistic| > |t_critical| then reject null hypothesis | |
| 256538250 | conclusion | -mention significance level -show equation from decision rule -relate back to question | |
| 256538251 | t statistic | coefficient ------------------ standard error | |
| 256538252 | coefficient of correlation | multiple R (from statistics table) strength + duration of linear relationships between two variables | |
| 256538253 | coefficient of determination | R^2 how well regression equation represents the data | |
| 256792056 | mad | mean absolute deviation | |
| 256792057 | mad | Σ|y-F| -------------- n where y=current, F=forecast | |
| 256792058 | ssfe | sum of squares forecasting error | |
| 256792059 | ssfe | Σ(y-F)^2 where each formula is summed then added | |
| 256792060 | time series forecasting with regression | F=(^B^_0+^B^_1xT)xSI_t where SI_t=seasonal index for t and ^B^_0+^B^_1xt=linear trend value for period t | |
| 256792061 | calculator standard deviation | (1) 'Statistics' (2) input values (3) check set, with 1 var freq. to list 2 (4) click 'calculate' (5) click '1-var' note xσ_(n-1) | |
| 256792062 | time series components | -trend -cycle -seasonal component -random variation | |
| 256792063 | trend | smooth pattern, usually over a year | |
| 256792064 | cycle | wavelike pattern, usually over a year | |
| 256792065 | seasonal component | calender repetitve behaviour, usually under a year | |
| 256792066 | random variation | irregular, unpredictable changes, hides other components | |
| 256792067 | k-period moving average | -arithmetic average of time series -for time period 't' -starting at period 't' and moving 'k' period backwards | |
| 256792068 | simple aggregate price index | ΣP_1 --------- x 100 ΣP_0 where P_1=price in current period and P_0=price in base year period | |
| 256792069 | laspeyes index | ΣP_1xQ_0 -------------- x 100 ΣP_0xQ_0 | |
| 256792070 | paasche index | ΣP_1xQ_1 -------------- x 100 ΣP_0xQ_1 | |
| 256792071 | Fisher Price Index | SQR(I_LPxI_LL) | |
| 256792072 | real price | nominal price ------------------ x 100 CPI |