INTRODUCTION TO ECONOMETRICS II
ECO 306
NOUN
21
Rule 2: If you multiply a random variable by a constant, you multiply its expected value by the same constant. If X is a random variable and b is a constant,
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…[1.03]
Rule 3: The expected value of a constant is that constant. For example, if b is a constant.
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…[1.04] Putting the three rules together suppose we wish to calculate E(Y), where we have
…[1.05] and and
are constants. Then,
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)
…[1.06]
(
) (
) ( )
…[1.07
=
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1.1.3.4 Sampling theory
The goals of a sample survey and an experiment are very different. The role of randomisation also differs. In both cases, without randomisation, there can be no inference. Without randomisation, the analyst can only describe the observations and cannot generalise the results. In the sample survey, randomisation is used to reduce bias and to allow the results of the sample to be generalised to the population from which the sample was drawn. In an experiment, randomisation is used to balance the effects of confounding variables. The objective of asample survey is often to estimate a population mean and variance.
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