Used in the determination of causality

Assignment Help Finance Basics
Reference no: EM131504477

In the description of the statistical models that relate one variable to the other we used terms that suggest a causality relation. One variable was called the "explanatory variable" and the other was called the "response". One may get the impression that the explanatory variable is the cause for the statistical behavior of the response. In negation to this interpretation, some say that all that statistics does is to examine the joint distribution of the variables, but casuality cannot be inferred from the fact that two variables are statistically related.

What do you think? Can statistical reasoning be used in the determination of causality?

As part of your answer in may be useful to consider a specific situation where the determination of casuality is required. Can any of the tools that were discussed in the book be used in a meaningful way to aid in the process of such determination?

Notice that the last 3 chapters dealt with statistical models that related an explanatory variable to a response. We considered tools that can be used when both variable are factors and when both are numeric. Other tools may be used when one of the variables is a factor and the other is numeric. An analysis that involves one variable as the response and the other as explanatory variable can be reversed, possibly using a different statistical tool, with the roles of the variables exchanged. Usually, a significant statistical finding will be still significant when the roles of a response and an explanatory variable are reversed.

Reference no: EM131504477

Questions Cloud

Summarize total binding department costs : Summarize total binding department costs for April 2014, and assign these costs to units completed (and transferred out) and to units in ending work in process.
What is the effective rate of interest : What is the effective rate of interest?
Develop one directive for joyce : How might you use impathic confrontation with joyce to seek clarification, to discover a new resolution of difficulties, and to provide a supportive challenge?
Children in social science research : What do you think is the most important ethical consideration when including children in social science research? Why?
Used in the determination of causality : What do you think? Can statistical reasoning be used in the determination of causality?
What should you do to try and resolve the given situation : How do you think these weaknesses would effect the financial statements and what should you do to try and resolve the situation?
What price would you expect tcks common stock to sell : If the risk-free rate is 9.2 percent and the market risk premium is 6 percent, at what price would you expect TCK’s common stock to sell?
Difference between a statistically significant result : What is the difference between a statistically significant result and a clinically or "real world" significant result?
Provide a statement of your organizations goals : Provide a statement of your organization's goals in terms of workplace safety, risk management, or quality improvement.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd