Statistical inference is concerned with the question of quantifying statistical uncertainty of our estimators of interest, that is, how much can we learn about the parameter of interest from a data sample of a finite length. It tells us how much should/could we trust the results that we get.

The first part is related to Maximum likelihood estimation. An approach to estimation that is based on a likelihood principle, the parameter values are chosen to be most compatible with the observed data sample. Maximum likelihood estimator has some very favourable properties.

In the second part we talk about the computational class of methods for statistical inference based on resampling, the Bootstrap. This is a very general principle that can be applied in variety of settings when other approaches to statistical inference are too complex or not feasible.

The R file with examples can be downloaded here.

In the last part of the series of lectures in the second day, a short introduction to another topic of this course - how to recover causal relationship from observational data, is to be presented. In other words how to tell correlation from causation. Careful distinction between the two is one of the main goals of econometrics. Economists are well trained for this task. The presentation will review some of the popular and successful examples where we could recover causal relationships even without an experiment.

Videos are here:

This might give you an idea what will be covered later. We will look at the econometric techniques that are suitable (not only) for these purposes.

Assignment 1

Assignment 1 (updated 20.Oct) is due on 30.Oct 6 Nov (the deadline has been postponed). It may be completed in groups of maximum size 3. 

You can download the file here:

This assignment serves as an important tool in the learning process, I would like to suggest that you try to take advantage of it. 

(NB: I have tried to use one of the popular LLM (large language model) to solve these exercises and it did not do well.)

Solutions to Assignment 1

Here are my solutions (comments in the Rcode) 

and Q4 from the Regression basics separately as a pdf:

Thanks for all the hard work, I hope you have learnt something in the process.