ECON 2B03 Lecture Notes - Lecture 10: Cumulative Distribution Function, Weighted Arithmetic Mean, Probability Distribution
25 Apr 2016
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Document Summary
A "probability distribution" is the theoretical i. e. , analytical) counterpart of the frequency distributions discussed earlier. By applying the laws of probability we can determine the probability that variable takes on specific value or range of values. We can always convert a categorical variable into a quantitative one by assigning it a numerical value, and it is often more convenient notationally speaking to do so. The simplest example is a male/female sample where males are assigned the value 1 and females the value 0. In this case, we talk about the random variable x denoting a person"s sex, with x e {0,1}, which has discrete "support" By way of example, considering tossing a fair coin 3 times. There are 8 possible outcomes, each outcome is equally likely, and has probability 1/8. Letting x denote the number of heads obtained in 3 tosses, find p(x = 2) We see that p(x = 2) = p(a2) + p(a3) + p(a4) = 3/8.
