PS2 Part 1 V 7 CLASS

Outline About the Course Introduction to Sampling Census vs.
Sampling Probability Sampling
Probability and Statistics II
Karthik Sriram
Indian Institute of Management Ahmedabad
karthiks@iima.ac.in
August 12, 2017
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Karthik Sriram Indian Institute of Management Ahmedabad karthiks@iima.ac.in
Outline About the Course Introduction to Sampling Census vs. Sampling Probability Sampling
Outline
1 About the Course
2 Introduction to Sampling
3 Census vs. Sampling

Nonsampling Errors
Sampling Bias and Sampling Error
4 Probability Sampling
Estimation of Proportion
Estimation of Population Mean
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Course Content
WELCOME!
Statistics is the science (and art!) of data analysis.
PS I (QM1a) basic probability is the foundation required for basic Statistics.
PS II (QM1b) will introduce Statistics. We will cover basic ideas under 3 topics
(a) Sampling and Estimation
(b) Testing of Hypothesis
(c) Linear Regression Modeling
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Examples for the 3 topics
(a) Example: Sampling and Estimation
What is the average salary for a graduating IIMA student ?
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(b) Example: Hypothesis Testing
Is the average salary for boys statistically different from that of girls ?
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(c) Example: Linear Regression
Can Salary be modeled as a function of CGPA, gender, past years of experience ?
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(c) Example: Linear Regression
Can Salary be modeled as a function of CGPA, gender, past years of experience ?
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Type of Data Studies
Such an enquiry typically involves design and collection of data followed by

analysis.
Such studies can be of two types
(a) Experimental Study
(b) Observational Study
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Experimental Study
Experimental Study
This typically involves an intervention at the time of data collection (treatment).
e.g. To study the effect of drug on head ache, create a control and treatment group,
administer placebo on control group and drug on the treatment group, and then
measure/compare the effect on both groups.
Experiment is usually designed in such a way (e.g. by ensuring different type of

individuals are represented in both groups etc) so that the impact can be attributed to
the treatment.
Experimental study is desirable when we want to establish causality.
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Observational Study
Observational Study
We observe the data as-is without any intervention.
For example, to study the relation between the salary, CGPA, number of years of past
experience, we just collect data on these variables from a sample of students and
analyze.
To draw causal inferences from such data is challenging; so one should not fall into
that trap while drawing inference. e.g. suppose you find that the average salary for
girls is higher than boys.... so that does not mean being a girl leads to higher
salary...there may be many other factors at play!
In this course, we mainly focus on inferences with observational data, we will look at
associations but not causality.
Causal inference with observational data needs advanced econometrics techniques

along with a good domain/contextual knowledge. 7/57
Course Evaluation.
1. Quizzes: 40% (open book/notes)
2. Class Participation: 10%

Attendance + answering my questions
You are welcome to ask questions or present view points but thats not part of CP.
3. Exam : 50% (open book / notes)
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What you need to do..
1. Gain familiarity with topics from text and slides before the class.
2. Pay attention in class and take notes of class discussions.
3. Slides will be shared with you.
Slides + Notes from class will ensure good understanding of content.
4. Work through exercises + practice problems by instructors will reinforce ideas.
4. Do not hesitate to seek help. Email is the easiest way (karthiks@iima.ac.in).
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Needless to say....
1. Do not come late to class... (you may be marked absent and/or asked to leave)
2. Do not leave class in between ..(you may be marked absent)
3. Ensure Minimum Attendance (13 of 15 sessions)
4. Avoid unnecessary distraction in class and do not disturb me/others.

No Email, text message, FB, Whatsapp, Twitter etc.
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Motivating Examples for Sampling
Consider the following questions
1. What percentage of businesses in India enabled non-cash payments post

November 8 2016?
2. What was the extent of under-reporting in tax among tax payers in India in FY
2016-17?
3. What was the average household expenditure during the Diwali month last year in
Ahmedabad?
Sampling and Estimation can help answer such questions.
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Some terms
To formulate an approach for these questions, the following ideas are essential
1 Population
2 Parameter (also referred to as Population Parameter)
3 Sampling Unit
4 Sampling Frame
5 Element
6 Variable
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Illustration of some terms
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Definition of terms
1 Population: collection of elements of interest, e.g. residents of a city.
2 Element: entity from which data is taken, e.g. individual in a house.
3 Sampling Unit: A unit that can be sampled, e.g. household
4 Sampling Frame: List of sampling units, e.g. list of households i = 1, 2, . . . , N.
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Definition of terms
1 Population: collection of elements of interest, e.g. residents of a city.
2 Element: entity from which data is taken, e.g. individual in a house.
3 Sampling Unit: A unit that can be sampled, e.g. household
4 Sampling Frame: List of sampling units, e.g. list of households i = 1, 2, . . . , N.
5 Variable: The quantity that is recorded for the sampling unit,

e.g. Xi = expenditure of house i.
6 Parameter: A particular summary measure of the population.

e.g. Mean = Average expenditure per household,
X1 + X2 + . . . XN
usually denoted by X = .
N
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Question
Question on Variable
Suppose we are estimating the percentage of households with atleast one senior
citizen.
What would be Xi and what would be X ?
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Approaches to Estimate
Two approaches can be used to estimate the parameter of interest.
1. Census: Collect data from every sampling unit in the frame and compute the
exact value.
Census is subject to possible Non-Sampling Errors.
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Approaches to Estimate
Two approaches can be used to estimate the parameter of interest.
1. Census: Collect data from every sampling unit in the frame and compute the
exact value.
Census is subject to possible Non-Sampling Errors.
2. Sample Survey or Sampling: Collect data only on a representative subset of

units.
Sampling is subject to Non sampling Errors as well as Sampling Bias and

Sampling Error.
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Nonsampling Errors
Non Sampling Errors: Measurement Error
Question 1: Measurement Error

Which of these is a better approach to determine how many students in a government
school can read and write Gujrati?
(a) Ask the pricipal to provide you the number of such kids in the school.
(b) Conduct a reading and writing proficiency test for the students and determine.
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Nonsampling Errors
Nonsampling Errors: Measurement Error
Example 2: Measurement Error

Is there anything wrong with this type of question ?
Do you like congress to win the next election and Rahul Gandhi to become the PM ?
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Nonsampling Errors
Nonsampling Errors: due to Bias in Response
Question: Bias
Is there any problem with this question?
Do you think the Bangalore city corporation is justified in cutting down beautiful
green trees to construct the high speed expressway that will perhaps only cater to
VIPs?
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Nonsampling Errors
Nonsampling Errors: Bias due to Nonresponse
Question: Bias due to nonresponse

Is there any problem with this approach?
To find out how many students in IIMA like a particular mobile App, an email with a
link to download the App is sent to all IIMA students and responses are sought.
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Nonsampling Errors
Nonsampling Errrors in a Census: in Summary
Controlling nonsampling errors in a large exercise like census is challenging.

Lot of units to cover and lot of personnel involved (difficult to train and ensure
consistency).
Nonsampling errors, when aggregated over a large number of units, can lead to
grossly wrong results.
A classic example is the opinion poll during Landon versus Roosevelt election in
1936.
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Nonsampling Errors
Sampling Illustration
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Nonsampling Errors
Sampling : some notations
In sampling, we would like to draw a (representative) subset of units from the

sampling frame.
representative : no particular bias should exist in selecting a sample.
Units in the population (i.e. sampling units) are denoted by i = 1, 2, 3, ..., N.
Values for X for units in the population are denoted by X1 , X2 , ..., XN (i.e. in
CAPS).
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Nonsampling Errors
Sampling : some notations (ctd)
We will denote sampled units as i = 1, 2, 3, . . . , n

being mindful that these units can be any of the units from the sampling frame.
e.g. First sampled unit may happen to be unit 100 in the sampling frame.
n is called the sample size.
Sampled values for the variable are denoted x1 , x2 , . . . , xn (i.e. small letters)
(X bar hat)= x =
Estimate of Population-Mean X , is denoted X x1 +x2 +...+xn
.
n
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Sampling Bias
Question: Sampling Bias

Is there anything wrong with this approach?
A sample of incoming PGP students are surveyed to determine which part of the
selection process CAT or Interview is more enjoyable.
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Sampling Error
Question: Sampling Error

A bag contains some green and some white pebbles. You want to find out what
percentage of the bag is green.
Is the following conclusion correct?

2
I randomly draw 5 pebbles, 2 out 3 turn out to be green. So, I conclude that 3
of the
bag is green pebbles.
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Sampling Error
Even if the sample is representative of the population,

there is still one more type of error, which is unavoidable!.
Sampling Error arises because the estimate is based on a subset of the population
and not the entire population.
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Types of Sampling: Question
Question: Types of Sampling

Match each type of Sampling on the left with the correct example on the right.
Type of Sampling Example
1. Convenience Sampling a To survey a sample of Hyper-city customers, you stand at the

store entrance and reach out to people who enter.
b To determine main features to consider while buying a car,
2. Judgement Sampling
you pick a sample from a list of people who bought cars
recently.
c To determine the number of people per house in a remote

village who use mosquito nets, you start with a randomly
3. Systematic Sampling
selected house and then visit every 5th house along a
randomly chosen direction.
d To find out how many PGP students use contact lenses, you
procure a list of all the (say) 1000 students from PGP office.
4. Probability Sampling
Randomly choose 100 students from the list.
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Types of Sampling: Idea

Type of Sampling Idea
1. Convenience Sampling a Based on ease of reach or convenience.
2. Judgement Sampling b Uses expert judgement to determine what is representative.
3. Systematic Sampling c Random sampling but not every set of n units has equal
chance of making it to the sample of size n. So if units are
not homogenously distributed, there can be a bias.
e.g. you may end up choosing only corner houses.
4. Probability Sampling
d Sampling based on a pre-determined probability
distribution.e.g. In Simple Random Sampling, equal
probability assigned to every possible sample. This is the
most effective way to obtain a representative sample.
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Summary: Census vs Sampling
Census : subject to Nonsampling erorrs , difficult to control due to size of the

study.
Sampling
(i) Nonsampling errors/biases easier to manage due to smaller size.
(ii) Sampling Errors can be controlled in Probability Sampling by determining
appropriate sample size.
Probability sampling is the most preferred approach to sampling.
Convenience, Judgement or Systematic sampling may not be avoidable.

When used, the assumption is that they can be treated approximately as a
probability sample.
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Simple Random Sampling
Simple Random Sampling (SRS): A probability sampling where every sample of

size n has equal probability of getting selected.
SRS is the simplest form of Probability Sampling.
It forms the basis for many other more complex sampling designs (e.g. Stratified
sampling, Cluster sampling etc)
In this course, we will learn to work with
(a) SRS with Replacement (SRSWR)
(b) SRS without Replacement (SRSWOR)
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Choosing a Simple Random Sample: Steps
Suppose sampling frame is {1, 2, . . . , N}
Step 1 Choose a random number between 1 to N
Step 2 for SRSWR, repeat Step 1 until n units are selected
Note: here a unit can occur more than once in the sample.
Step 2 for SRSWOR, repeat step 1, but discard the sampled unit if it is already
in the sample so far. Go on until n distinct units are chosen.
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Choosing a Simple Random Sample: Steps + Packages
Suppose sampling frame is {1, 2, . . . , N}
Step 1 Choose a random number between 1 to N
In excel: use randbetween(1,N), in R: sample(c(1:N), size=1)
Step 2 for SRSWR, repeat Step 1 until n units are selected
Note: here a unit can occur more than once in the sample.
Step 2 for SRSWOR, repeat step 1, but discard the sampled unit if it is already
in the sample so far.
Go on until n distinct units are chosen.
In R: sample(c(1:N), size=n, replace=FALSE)

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A Side Note on Packages
We will use some packages during this course: mostly Minitab , Excel
R is a very powerful and useful software. It is not necessary for this course.
It will be useful if you learn.
For anyone interested, I have created a presentation on Introduction to R,

available on my webpage.
https://www.iima.ac.in/web/faculty/faculty-profiles/karthik-sriram
Click on Teaching, see under some Teaching Material.
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SRS : some probability questions
1. In SRSWR, what is the probability of getting any particular sample of size n?
2. In SRSWOR, what is the probability of getting any particular sample of size n?
3. In SRSWR, what is the probability that any particular unit (say unit 1) is present
a sample of size n?
4. In SRSWOR, what is the probability that any particular unit (say unit 1) is
present a sample of size n?
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SRS Estimation
In SRS, we will mainly consider two problems
a) Estimation of Proportion (p) : e.g. % people supporting a party in a city.
b) Estimation of Mean ( or X ) e.g. Average household expenditure in a city.
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Exercise: Estimation of Proportion
Project Description Summary of Outcome
Smart phone usage for in-store shopping

Google along with M/A/R/C research,
conducted a survey in the U.S to study the
impact of smart phones on in-store shopping.
They surveyed a random sample of 1,507
smart-phone owners who use mobile devices for
shopping, who completed a 3 part survey for a
shopping trip. Questions of interest would
include for e.g. When do they use it, before
going to the store, to search a store? do they
use it inside the store while shopping? etc.
Assume the number of smart-phone owners is

200000.
courtsey: Google Projects
http://www.thinkwithgoogle.com
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Project Description Answer the following questions.
Smart phone usage for store shopping What is the population here ?
Google along with M/A/R/C research,
conducted a survey in the U.S to study the
impact of smart phones on in-store shopping. What is the sampling frame ?
They surveyed a random sample of 1,507
smart-phone owners who use mobile devices for
shopping, who completed a 3 part survey for a How many units N are in the sampling
shopping trip. Questions of interest would frame ?
include for e.g. When do they use it, before
going to the store, to search a store? do they
use it inside the store while shopping? etc. Note that they are using a sample. What
is the sample size n?
Assume the number of smart-phone owners is
200000.
What assumption are they making about
the sample?
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Answer the following questions Summary of Outcome
Name any two population parameters of

interest.
What is their estimate for % of smart

phone shoppers?
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How do you think the estimate of % of

smart phone shoppers (p) is computed?
(a) What possible values can each xi take

for any sampled unit i ?
(b) What is the mathematical formula for

p, the estimator of p, in terms of xi ?
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Is this statement correct ? Why or Why

not?.
We can conclude that 79% of smart

phone owners are smart phone shoppers
?
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Point-Estimator /Point-Estimate
p is called the Point-Estimator.
The particular value for p obtained in the chosen sample is called Point-Estimate.
Note that some books may use the terms inter-changeably!
Note that value of p we get depends on the particular sample obtained. Here,
Point-Estimate for p=79%.
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Point-Estimator /Point-Estimate
p is called the Point-Estimator.
The particular value for p obtained in the chosen sample is called Point-Estimate.
Note that some books may use the terms inter-changeably!
Note that value of p we get depends on the particular sample obtained. Here,
Point-Estimate for p=79%.
If the sampling had been repeated once again, we would have chosen different set
of 1507 owners, and hence its very likely that a different value for p would have
been obtained.
So, if we consider all possible samples, we get a whole collection of values of p,

with different probabilities of occurence.
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Sampling Distribution
Note that the Point-Estimator is a random variable, because the value it takes
depends on a random outcome, i.e. the random sample that is drawn.
Sampling Distribution
The collection of all possible values for the Point Estimator, that can potentially occur
when we draw a sample of size n, along with the likelihood of their occurance (either
probability density or probability mass function), is referred to as the Sampling
Distribution of the Point-Estimator.
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Sampling Distribution of p in SRSWR
(
1, with probability p
Note that x1 Bernoulli(p), i.e., x1 .
0, with probability (1-p)
Due to SRSWR, x1 , x2 , . . . , xn are i.i.d (independent and identically distributed)

Bernoulli(p)
Question: so, t = x1 + x2 + . . . + xn follows what distribution ?
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Concept of Bias
Since the Estimator is a random variable, we can talk about its expected value, i.e.
the mean value of the estimator as per the sampling distribution.
Bias of the Point Estimator

Bias is defined as the difference between the Expected value of the estimator and the
population parameter we are trying to estimate. We say the estimator is unbiased if
Bias=0, i.e. when E (p) = p.
Bias(Point Estimator) = E [Point Estimator] Parameter .
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Bias for p in SRSWR
Due to SRSWR, x1 , x2 , . . . , xn are i.i.d Bernoulli(p).
1 Pn
E (p) = n i=1 E [xi ] = p
Bias(p) = E (p) p = 0
In SRSWR, p is an unbiased estimator for p.
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Concept of standard error
Standard Error (SE)

This is a measure of accuracy the estimator in estimating the parameter of interest. It
is defined as:
q
SE(Point Estimator) = E [(Estimator parameter )2 ]
For the point estimator, p, SE is computed as

p
SE(p)=Standard Error of p to estimate p = E [(p p)2 ].
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Concept of standard error
Standard Error (SE)

This is a measure of accuracy the estimator in estimating the parameter of interest. It
is defined as:
q
SE(Point Estimator) = E [(Estimator parameter )2 ]
For the point estimator, p, SE is computed as

p
SE(p)=Standard Error of p to estimate p = E [(p p)2 ].
Note that since E [p] = p, SE(p) = standard deviation SD(p).
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What is the standard error of the

estimator (assuming SRSWR)?

estimator (assuming SRSWOR)?
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A note on sampling in infinite populations
Typically, for finite populations, sampling is done without replacement.
However, note that if N is large WR and WOR will be the same!

q
Nn
because N1
1 , as, N
Populations can be infinite ! e.g. Wind Speeds in a particular location.
There is no Sampling Frame to do SRS for infinite populations, but the random
sample needs to be selected so that
(a) Every unit that is selected comes from the same population
(b) Each unit is selected independently.
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estimate (assuming SRSWOR)?
q q
Nn p(1p)
SE (p) = N1 n
q q
2000001507 .79(1.79)
SE (p) = 2000001 1507 =
SE (p) =0.0105.
Note since E [p] = p, Standard Error and Standard Deviation are the same. In general,
an estimator for a population parameter may be biased. For the problem of estimating
proportions, it happens to be unbiased.
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Exercise: Determining Sample Size based on condition on SE
Standard deviation of the estimate

(assuming SRSWOR):
q q
Nn p(1p)
SE (p) = N1 n
Could we have chosen n prior to the

survey so that SE (p) <= = 0.01 ?
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Summary: Estimation of Proportion (p)
Two sampling designs: SRSWR and SRSWOR.
For large N, the two are approximately the same.
Point Estimator(p) is a random variable. Its distribution is called Sampling

Distribution.
For both SRSWR and SRSWOR, p = x is unbiased, i.e. E [p] = p
q q q
p(1p) Nn p(1p)
For SRSWR SE (p) = n
, for SRSWOR, SE (p) = N1
n
.
Using the formulas for SE, we can choose n while planning the survey, to control
sampling error to a desired level of accuracy. This is possible only when sampling
is planned using probability sampling.
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An unusual Example of Sampling: Crowd Estimation
In the past, street protests have lead to military coup in Egypt. Sizes of crowds
determine the strength of such protests.
Crowds are often estimated based on pictures of aerial view of crowds!.
Figure: Tahrir Square on Novemeber 27 2012: Protests against Mohd Morsi
How can sampling be done here ?
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Exercise: Estimating Mean
Exercise: Estimating Mean

An income-tax audit is planned in a business district of a city consisting of 100
businesses. The auditor has a record of the income filed by each business. The
objective is to determine how much under or perhaps over-reporting exists.
Since audit is a time consuming process, the auditor plans to take an SRSWOR
sample of 5 businesses. She wants to answer following questions
(a) What proportion of businesses are under-reporting?
(b) What is the extent of under-reporting ?
(c) What is the estimate of total loss to Incom-tax department from these businesses?
(d) It is also required that a measure of accuracy be reported for these estimates.
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Exercise: Population
Table: Population Values
unit Reported Audited unit Reported Audited

1 2038642 3315379 26 1999788 3108352
2 1913064 2940391 27 1897488 3321842
3 2182653 2500547 28 2248574 2395434
4 2358678 3175269 29 1867883 2656837
5 2199321 3305205 30 2033325 2880150
6 2221498 2787269 31 1889359 3002753
7 1944383 2859098 32 2019636 3157186
8 2203841 3069309 33 1770667 3494016
9 2009087 3242680 34 1750015 3115390
10 2315156 3238158 35 1959578 3131504
11 2043658 2900762 36 2035500 2487454
12 1790693 2999451 37 2261529 2862292
13 1942262 2908269 38 1731413 2855181
14 2096310 3009974 39 2172217 3132036
15 1756725 3457691 40 2046575 2965062
16 2061627 2723674 41 2208451 3386484
17 1895964 2757380 42 2265820 3293434
18 1911537 2666675 43 2189192 3159985
19 1880137 3186752 44 1802875 2987870
20 2258916 2696655 45 1756827 2891414
21 2167078 3181502 46 1674159 2929422
22 1886797 2892519 47 2018463 3334932
23 2157684 2966856 48 1995577 3261660
24 1766814 3257874 49 2102696 3187304
25 1893836 3001743 50 1954089 3144499
55/57
Exercise: Estimation of Mean
Do the following

Variable X = Audited - Reported
unit Reported Audited unit Reported Audited
1 2038642 3315379 26 1999788 3108352
2 1913064 2940391 27 1897488 3321842
3 2182653 2500547 28 2248574 2395434
Population values X1 , X2 , ..., XN , 4 2358678 3175269 29 1867883 2656837
N = 50. 5 2199321 3305205 30 2033325 2880150
6 2221498 2787269 31 1889359 3002753
7 1944383 2859098 32 2019636 3157186
8 2203841 3069309 33 1770667 3494016
9 2009087 3242680 34 1750015 3115390
Pretend Population values can be 10 2315156 3238158 35 1959578 3131504
11 2043658 2900762 36 2035500 2487454
known only for the chosen sample 12 1790693 2999451 37 2261529 2862292
13 1942262 2908269 38 1731413 2855181
14 2096310 3009974 39 2172217 3132036
15 1756725 3457691 40 2046575 2965062
16 2061627 2723674 41 2208451 3386484
Parameter = X , to be 17 1895964 2757380 42 2265820 3293434
estimated. 18
19
1911537
1880137
2666675
3186752
43
44
2189192
1802875
3159985
2987870
20 2258916 2696655 45 1756827 2891414
21 2167078 3181502 46 1674159 2929422
22 1886797 2892519 47 2018463 3334932
Draw SRSWOR: x1 , ..., xn , 23 2157684 2966856 48 1995577 3261660
24 1766814 3257874 49 2102696 3187304
n = 5. 25 1893836 3001743 50 1954089 3144499
56/57
Exercise: Estimation of Mean
Do the following

Compute the point estimator for
X unit Reported Audited unit Reported Audited
1 2038642 3315379 26 1999788 3108352
2 1913064 2940391 27 1897488 3321842
3 2182653 2500547 28 2248574 2395434
4 2358678 3175269 29 1867883 2656837
Compute its standard error. 5 2199321 3305205 30 2033325 2880150
6 2221498 2787269 31 1889359 3002753
7 1944383 2859098 32 2019636 3157186
8 2203841 3069309 33 1770667 3494016
9 2009087 3242680 34 1750015 3115390
10 2315156 3238158 35 1959578 3131504
11 2043658 2900762 36 2035500 2487454
12 1790693 2999451 37 2261529 2862292
13 1942262 2908269 38 1731413 2855181
14 2096310 3009974 39 2172217 3132036
15 1756725 3457691 40 2046575 2965062
16 2061627 2723674 41 2208451 3386484
17 1895964 2757380 42 2265820 3293434
18 1911537 2666675 43 2189192 3159985
19 1880137 3186752 44 1802875 2987870
20 2258916 2696655 45 1756827 2891414
21 2167078 3181502 46 1674159 2929422
22 1886797 2892519 47 2018463 3334932
23 2157684 2966856 48 1995577 3261660
24 1766814 3257874 49 2102696 3187304
25 1893836 3001743 50 1954089 3144499
57/57

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Outline About the Course Introduction to Sampling Census vs.

Sampling Probability Sampling

Probability and Statistics II

August 12, 2017

1 About the Course

3 Census vs. Sampling

PS I (QM1a) basic probability is the foundation required for basic Statistics.

(a) Sampling and Estimation

(b) Testing of Hypothesis

(c) Linear Regression Modeling

Examples for the 3 topics

(a) Example: Sampling and Estimation

What is the average salary for a graduating IIMA student ?

Examples for the 3 topics

(a) Example: Sampling and Estimation

What is the average salary for a graduating IIMA student ?

(b) Example: Hypothesis Testing

Examples for the 3 topics

(a) Example: Sampling and Estimation

What is the average salary for a graduating IIMA student ?

(b) Example: Hypothesis Testing

(c) Example: Linear Regression

Can Salary be modeled as a function of CGPA, gender, past years of experience ?

Examples for the 3 topics

(a) Example: Sampling and Estimation

What is the average salary for a graduating IIMA student ?

(b) Example: Hypothesis Testing

(c) Example: Linear Regression

Can Salary be modeled as a function of CGPA, gender, past years of experience ?

Type of Data Studies

Such an enquiry typically involves design and collection of data followed by

Such studies can be of two types

(a) Experimental Study

(b) Observational Study

Experiment is usually designed in such a way (e.g. by ensuring different type of

Experimental study is desirable when we want to establish causality.

Causal inference with observational data needs advanced econometrics techniques

1. Quizzes: 40% (open book/notes)

2. Class Participation: 10%

3. Exam : 50% (open book / notes)

What you need to do..

2. Pay attention in class and take notes of class discussions.

3. Slides will be shared with you.

Slides + Notes from class will ensure good understanding of content.

4. Work through exercises + practice problems by instructors will reinforce ideas.

4. Do not hesitate to seek help. Email is the easiest way (karthiks@iima.ac.in).

2. Do not leave class in between ..(you may be marked absent)

3. Ensure Minimum Attendance (13 of 15 sessions)

4. Avoid unnecessary distraction in class and do not disturb me/others.

Motivating Examples for Sampling

Consider the following questions

1. What percentage of businesses in India enabled non-cash payments post

Sampling and Estimation can help answer such questions.

2 Parameter (also referred to as Population Parameter)

Illustration of some terms

1 Population: collection of elements of interest, e.g. residents of a city.

2 Element: entity from which data is taken, e.g. individual in a house.

3 Sampling Unit: A unit that can be sampled, e.g. household

4 Sampling Frame: List of sampling units, e.g. list of households i = 1, 2, . . . , N.

1 Population: collection of elements of interest, e.g. residents of a city.

2 Element: entity from which data is taken, e.g. individual in a house.

3 Sampling Unit: A unit that can be sampled, e.g. household

4 Sampling Frame: List of sampling units, e.g. list of households i = 1, 2, . . . , N.