Statistics for Economics (ECO 1400)

Monsoon Semester 2022

Class days: Tuesday and Thursday

Instructors:
Faculty
Name: Dr. Anuradha Saha
Email Id: anuradha.saha@ashoka.edu.in
Office hours for students: Tue (3 – 5 pm). Other days by appointments

Office Location: Room 809, 8th Floor, AC04 building

Telephone Number: 0130-2303170 (Extn: 3170)

Teaching Assistants
Name: Rabi Mondal
Email Id: rabi.mondal_tf@ashoka.edu.in
Office hours for students: Wed (3 – 4 pm). Other days by appointments

Office Location: WS 810, 8th Floor, AC04 building

Course Overview:
This course is compulsory for all Economics Majors, PPE as well as Economics Minor.
This course introduces students to the probability and statistical methods necessary
for the study of economics at the undergraduate level. In particular, the course will
cover random variables, probability distribution, joint probability distribution,
interval estimation and hypothesis testing.

Learning Outcomes:
 The first objective will be to learn simple data collection, presentation and
analysis skills.
 (1) Random variables and its applications, (2) sampling and statistical tests are
the two key topics of the course. We will spend the first half of the semester in
learning theoretical concepts of probability and random variables. The second
half of the semester would be on applying these concepts in applied problems
and sampling.
Required Course Material:
 Sheldon Ross. A First Course in Probability. 9th Edition. Pearson
 Roxy Peck, Chris Olsen and Jay L. Devore. Introduction to Statistics and Data
Analysis. 4th Edition. Cengage Learning
 Irwin Miller and Marylees Miller. John E. Freund's Mathematical Statistics. 8th
Edition. Pearson

You should be able to do all end-of-chapter questions. Other books you can lookup
are

 Gudmund R. Iversen and Mary Gergen. 2011. Statistics: The Conceptual

Approach. Springer
 Richard J Larsen and Morris L Marx. An Introduction to Mathematical Statistics
and Its Applications. 5th Edition. Pearson
 Allen Craig, Robert V. Hogg and Joseph W. McKean. Introduction to
Mathematical Statistics. 7th Edition. Pearson.
 Sheldon Ross. Introduction to Probability and Statistics for Engineers and
Scientists. 5th Edition. Academic Press

Evaluation:
Student grades have four components: final exam (30% weightage), class probes
(25%), take-homes (25%) and project (20%). Final exam is a 100 marks, 2.5 hours
assessment on the entire syllabus. Students should exhibit expertise in initial topics
and in-depth knowledge of the latter ones discussed in the course. Class probes are
monthly problem solving sessions (about 3 in a semester). These sessions would give
students an opportunity to apply recently learnt concepts to new problems and expose
them to more interesting ones in a limited time frame. The take-homes are fortnightly
problem sets which are to be solved at home (about 5 in a semester). Students have to
do a three group projects, once in a month.

The instructor does not entertain marks obsession. Students should be able to solve
different problems discussed in and out of class with precision. The out of class
problems will be considerably harder than in-class problems. Students should make
use of office hours for any extra help or resources they require.

As is the Ashoka grading scheme:

 A/A- letter grade = outstanding. Students know the mathematical techniques and
have the ability to apply them in novel problems.
 B+/B/B- letter grade = good. Students have expertise in most of the mathematical
techniques taught in the course. They may lack creativity in problem solving but
are well trained to do well in any mathematical or applied course.
 C+/C/C- letter grade = adequate. Student knows enough. If s/he tries to revise the
course content, s/he shall do well in any application of the course content.
 D+/D/D- letter grade = barely satisfactory. Student knows little. S/he requires
guidance and then s/he would be able to apply the courses’ concepts.
 F letter grade = unsatisfactory. Student knows less than 40% of the course content.
S/he has not achieved the minimum standards for this course.

Course Rules:
1. The central objective of the course is to learn probability and statistics. To
achieve this goal, we would solve innumerous problems and will frequently
change the type of problems we encounter. In class, we will discuss problems
with a difficulty of medium level. Problems in take-homes will be harder and
problems in class probes may be quite hard. Some may be in standard format,
some may be word problems or graphical or case studies or multiple choice
questions or in some format which shall invoke critical thinking.
2. You will be shared an online Excel sheet titled “ECO 1400 (Monsoon 2022)”. It
will record learning outcomes, individual performances and all course related
announcements will be posted. It is your task to track it.
3. Students missing more than 6 classes would get F in their final grade. You can
avail 3 sick leaves; the sick leaves will not count towards absenteeism. But to
avail sick leave, students have to inform before/during class via email.
4. If students are late in entering the class by more than 5 minutes, they would be
marked absent. Late assignments would not be graded.
5. Graphical calculators are not allowed but scientific calculators are allowed.
Students shall not be allowed to share calculators in final exams or during class
probes.
6. There is zero tolerance for accessing resource materials in final exams or during
class probes. If you are found cheating in any of the quizzes or tests you will
get an automatic F in the course.

Course map:
Lecture Title Book

2 classes Backgrounder Chapters 1 - 4, Iversen

and Gergen
Topics: Mean, Median, Mode, Percentiles, Variance,
Distribution,
Graphs and Plots, Symmetry of graphs,
Random Variables
1 class Combinatorial Analysis Chapter 1, Ross

The Basic Principle of Counting,

 Permutations,
Combinations, Binomial Theorem (No Proof),
Multinomial Coefficients
1 class Probability Chapter 2, Ross

Sample Space and Events

Axioms of Probability
Some Simple Propositions (with Proofs)
Sample Spaces having Equally Likely Outcomes
2 classes Conditional Probability and Independence Chapter 3, Ross

Conditional Probabilities
Bayes’ Formula (with proofs)
Independent Events
3 classes Random Variable Chapters 4, 7 Ross
Discrete Random Variables, Properties of The Cumulative Chapters 3, 4 Miller and
Distribution Miller

Mathematical Expectations
Expected Value
Expectation of a Function of a Random Variable
Variance
Expectation of Sums of Random Variables
Chebyshev’s Theorem (No Proof)

All Proofs, wherever used.

2 classes Special Probability Distributions Chapter 5, Miller and
(Bernoulli, Binomial, Poisson are very important. All Miller
Proofs.) Second half Chapter 4,
Ross
2 classes Continuous Random Variables Chapter 6, Miller and
Special Probability Densities Miller
(Uniform, Normal, Exponential are very important. All Second half Chapter 5,
Proofs.) Ross

https://onlinecourses.science.psu.edu/stat414/node/88
1 class Joint Distribution Functions

Marginal Distribution Functions

1 class Independence, Covariance, Variance of Sums, and Chapter 4, Miller and
Correlations Miller
All Proofs, wherever used. Chapter 7, Ross
 1 class Functions of One Random Variable. Chapter 7, Miller and
Very Important. Miller

1 class Sampling Distribution Chapter 8, Miller and

Complete Chapter. Only Proofs done in Class Miller
4 classes Interval Estimation Chapter 11, Miller and
Complete Chapter. Very Important. Miller
https://onlinecourses.science.psu.edu/stat414/node/194
1 class Point Estimation (may be shortened) Chapter 10, Miller and
Unbiased Estimators Miller
Efficiency
Just state: Method of Moments, Method of Maximum
Likelihood, Bayesian Estimation (Ideas Only)
1 class Hypothesis Testing (Testing a Statistical Hypothesis) Chapter 12, Miller and
Miller
2 classes Hypothesis Testing, Testing of Hypothesis including Chapter 13, Miller and
Mean, Variances and Proportions Miller

Topics (1-5)

One extra class in reading week

Discussion Section:
We plan to have once a week discussion sections. Students will be exposed to more
interesting and involved problems in the subject. The project presentations will be
conducted in the DS.

Students will be consulted in scheduling the DS hour slot. Attendance is strongly

advised.

How to Succeed in This Class:

 Read before lecture. Set aside time before class to read the section of the book
covered in lecture.
 Do lots of problems. You will need a lot of repetition to get these techniques
down. If you have the time, I would encourage you to do extra problems from
the book.
 Do the homework well. Doing lots of practice problems is a great idea, but more
importantly you should think critically about the homework problems. After
you complete a problem, ask yourself the following questions:
o Does my solution make sense? If it’s a word problem, is my solution
physically possible?
o Can I interpret the equation or its solution geometrically, or could I
apply it to a “real world” problem?
 o What techniques did I use and how did I know to use them? How would
I recognize such a problem on an exam?
o How would I approach the problem if it were slightly different, e.g. if I
had different numbers? Would I need different techniques in some
situations?
• Work together. The best way to learn something is by explaining it to others.
Your classmates can help you refine your understanding of the subject.
• Come to office hours or make an appointment. If you have any difficulty with
the homework, or if you have any questions about the material, please don’t
hesitate to come to office hours. If you can’t make regular office hours, feel free
to make an appointment with me.

(This document was last updated on 7th Sep 2022)