Statistics How To

Statistics Definitions > In statistics, a contrast is a linear combination of variables such that all the coefficients add up to zero. One way to think of it is as a set of weighted variables. In statistical tests, they define specific comparisons between variables. This might be scores, means or something else. You choose the weighting … Read more

Statistics Definitions > What is Bessel’s Correction? Bessels’ correction refers to the “n-1” found in several formulas, including the sample variance and sample standard deviation formulas. This correction is made to correct for the fact that these sample statistics tend to underestimate the actual parameters found in the population. Bessel’s is also found in calculations … Read more

Regression Analysis > Exogeneity is a standard assumption made in regression analysis, and when used in reference to a regression equation tells us that the independent variables X are not dependent on the dependent variable (Y). This does not mean there is no connection; since Y is dependent, it will still depend on the independent … Read more

Statistics Definitions > The Delphi method, also called a Delphi study, is an intensive questionnaire used to bring a group of experts to a consensus. It is widely used in investment forecasting but has also become commonplace in such diverse fields as medicine, psychology, and political science. The term “expert” is open to debate but … Read more

Time series > Linear prediction is a technique for anlayzing time series; It allows us to predict future values from historical data. It is often used in digital signal processing, because it allows the future values of a signal to be estimated in terms of a linear function of past samples. Types of Linear Prediction … Read more

Statistics Definitions > Gauss Markov Theorem The Gauss Markov theorem tells us that if a certain set of assumptions are met, the ordinary least squares estimate for regression coefficients gives you the best linear unbiased estimate (BLUE) possible. Gauss Markov Assumptions There are five Gauss Markov assumptions (also called conditions): Linearity: the parameters we are … Read more

Clustering > What is Ward’s Method? Ward’s method (a.k.a. Minimum variance method or Ward’s Minimum Variance Clustering Method) is an alternative to single-link clustering. Popular in fields like linguistics, it’s liked because it usually creates compact, even-sized clusters (Szmrecsanyi, 2012). Like most other clustering methods, Ward’s method is computationally intensive. However, Ward’s has significantly fewer … Read more

Statistics Definitions > Volatility is a measure of change over time. In statistics, it’s used in a few areas, such as differential equations in the OU process. In stock markets, it quantifies a stock’s lack of stability or the tendency of its prices to move up and down. Usually, the higher the volatility, the riskier … Read more

Descriptive Statistics > What is an NP Chart? An NP chart allows a researcher to keep track of whether a measurement process is within bounds or ‘out of control’. It records the number of non conforming units or defective instances in the measurement process. The data it records is simple, binary data: nonconforming vs. conforming, … Read more

Experimental Design > Cross lagged panel design is a type of structural equation model where information is collected at two or more points in time. It’s used primarily to assess causal relationships (which may potentially be bi-directional) in a non-experimental setting, i.e., where variables are not manipulated but simply recorded. You would choose a cross … Read more