Economics vocabulary

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Identification strategy Angrist and Krueger (1999) used the term identification strategy to describe the manner in which a researcher uses observational data (i.e., data not generated by a randomized trial) to approximate a real experiment. [Mostly Harmless Econometrics] —

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Linear Regression Linear regression is a linear approach to modelling relationship between Y variable and X variable. —

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Non-parametric Non-parametric means that when analysis is conducted, there is NO assumption are made about data generating process, from what distribution our sample were drawn(normal, bimodal, etc). —

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Parametric Parametric means that when analysis is conducted, there are assumptions made about data generating process. —

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Internal validity Internal validity means, do we get right coefficints for the sample that we are studying. —

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External validity External validity means, does our \(\hat{\beta}\) that we estimated from our sample, still relavant for the larger population. —

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Correlation Correlation is the statistical relationship between two variables(two columns of data). Correlation can take any value between -1 and 1. For example from common sense we know, that the number years of your work experience is positevely correlated with your wages. —