ECO 403 STATISTICAL METHODS FOR ECONOMICS Pre-requisites for the Course: None
Course Objective: Provide students the basic understanding and knowledge of statistical tools and
techniques that are used in the rational decision making in the field of applied economics.
On completion of the course, the students will be able to:
Unit-I
LO1
Understand the basic concepts of
statistics and learn how to
present, graph, tabulate and
describe the data, use various
concepts and theories of
probability.
Unit-II
LO2
Differentiate between census
and
sample
and
obtain
knowledge of various types of
sampling
methods
and
understand z, t, F, Chi-square
( 2) distributions and their
estimation.
Unit-III
LO3
Develop
and
examine
hypothesis
testing
under
different sample distributions
and analyses the relationship
between different variables
within correlation and regression
models.
Unit-IV
LO4
Measure several types of index
numbers and use them for
economic analysis.
Note: LO- Learning Outcome
Unit I Presentation and Descriptive Analysis of Data and Probability Theory
Classification and sources of data; Presentation: Graphs, Tabulation and Frequency
distributions; Central tendency, dispersion, skewness, kurtosis, and moments.
Classical definition of probability; Axiomatic probability: sample space and event, axioms and
laws of probability, conditional probability and independence; Random variables; Discrete and
continuous probability distributions, Expectation, Cumulative distribution function and
probability density function; Continuous probability distributions - Normal distribution, Law
of large numbers, Central Limit Theorem; Discrete probability distributions-Binomial
distribution, Poisson distribution, Geometric distribution, Negative binomial distribution.
Unit II Sampling Theory
Census and sample; Parameters and estimators; Properties of estimators; Systematic and
sampling errors; Probability and non-probability sampling techniques; Meaning of sampling
distribution: z, t, F, Chi-square (2) statistic; Point and interval estimates of parameters.
Unit III Tests of Hypothesis and Correlation and Regression Analysis
Formulation of Statistical Hypotheses; Type I and Type II errors, Power of a test; Tests based
on z, t, F and 2 statistic, Goodness-of-fit test, contingency tables and test for independence;
Analysis of variance.
Simple and partial correlations; Rank Correlation; correlation and covariance; Linear
regression - OLS estimation of relationship between variables.
Unit IV Index Numbers
Concept of an index number; Problems in the construction of index numbers; Laspeyres‘,
Pasche‘s and Fischer‘s Ideal Index Numbers; Wholesale Price Index Numbers and Cost of
Living Index Numbers.
Basic Reading
David P Doane and Lori E. Seward (2008), Applied Statistics in Business and Economics, 2nd
edition, McGraw-Hill/Irwin.
Gupta S.P. (latest), Statistical Methods, New Delhi: Sultan Chand & Sons.
Gupta, S. C. (1982), Fundamentals of Statistics, Bombay: Himalaya Publishing House.
Gupta, S. C. and V K Kapoor (latest), Fundamentals of Mathematical Statistics, Sultan Chand
& Sons.
Additional Reading
James T. McClave, P. George Benson and Terry Sincich (latest), Statistics for Business and
Economics, Prentice Hall.
John E. Floyd (2010), Statistics for Economists: A Beginning, University of Torontom
Unpublished
manuscript,
available
at:
http://www.economics.utoronto.ca/jfloyd/stats/ecstats.pdf
Nagar, A. L. and R. K. Das (1985), Basic Statistics, New Delhi: Oxford University Press.