Intro to Econometrics Using Excel for Estimation

Descriptive Statistics Measures of Central Tendency – Mean The average – Median The middle – Mode The most frequent

Descriptive Statistics Measures of Dispersion – Range – Standard Deviation

Normal Distribution EX – Grades – Test average is a 75 – Standard Deviation is 10 points 68.2% of the grades will be between 65 and 85

Normal Distribution EX – Grades – Test average is a 75 – Standard Deviation is 10 points 95.4% of the grades will be between 55 and 95

Linear Regression

Grade Attendance

Statistical Significance We can say an estimate is “statistically significant” at the 95% level if we can construct a confidence interval around the estimate that does not include zero EX.358 < β < 1.25 That is to say, we are 95% confident that there is a positive relationship between y an x

Normal Distribution Side note, Rule of thumb: if the t-statistic is larger than 2 then we can be 95% sure that the estimate is not zero

Getting Started First, you will need to load the “Analysis ToolPak” add-in if it is not already installed – Office Button – Excel Options

Getting Started 1.Click Add-Ins 2.Select Analysis ToolPak 3.Click Go

Getting Started Select the Analysis ToolPak and hit OK Once it has loaded your top bar should include a new icon under the Data tab

Application – On the website, there is data on the quantity, price, and average income for different sales areas for the Kalamazoo Brewing Company

Application