Statistical methods involve the collection of economic data, processing it, compiling and disseminating it for analysis purposes. Statistical economic data is obtained and applied by the economy of a country, region or even a group of countries. Economic statistical methods cover statistics and the probability theory as used by the economists.
Areas of Coverage
Statistical methods are divided into three main categories; the first category covers random variables and Probability distributions. This is further sub-divided into;
This involves the study of conditional probability and independence; sets and events; and probabilities and counting rules.
- Distribution functions and random variables
This discusses the application of the following statistical concepts in analyzing economic data; discrete and continuous random variables, Bayes theorem, cumulative distribution functions, probability distribution functions, and marginal and joint distributions.
The second category covers the transformation of the random variables and the expectations. This is then subdivided into subsections, namely;
- Random variables and their transformations
- Conditional distributions and expectations
- Special distributions
- Central limit theorems
- Law of large numbers
The third category is referred to as hypothesis tests and estimation. This comprises of;
- Estimation properties and methods
These include construction of estimators and application of the central limit theorem.