Ch. 3 Estimation 1 The Nature of statistical Inference It is argued that it is important to develop a mathematical model purporting to provide a generalized description of the data generating process. A prob bility model in the form of the parametric family of the density functions p=f(:0),0E e and its various ramifications formulated in last chapter
Information content of a random variable Random variable x Outcome of a random experiment Discrete R V takes on values from a finite set of possible outcomes PMF: P(X=y)=Py) How much information is contained in the event X=y? Will the sun rise today Revealing the outcome of this experiment provides no information Will the Celtics win the NBa championship? Since this is unlikely, revealing yes provides more information than revealing Events that are less likely contain more information than likely events