LECTURE 3

Statistical Modeling
S T AT I S T I C A L M O D E L I N G I N V O LV E S
THE USE OF PROBABILITY AND
S T AT I S T I C A L C O N C E P T S T O
D E S C R I B E A N D A N A LY Z E D AT A ,
MAKE PREDICTIONS, AND
U N D E R S T A N D T H E R E L AT I O N S H I P S
B E T W E E N VA R I A B L E S .

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Probability is a measure of the likelihood of an event
occurring. It provides a framework for quantifying
uncertainty. Probability theory allows us to model random
phenomena and make probabilistic predictions. Concepts
such as conditional probability, independence, and Bayes'
theorem are fundamental to statistical modeling.
A random variable is a variable whose
value is determined by the outcome of a
random event or process. It can take on
different values with certain probabilities.
Random variables can be discrete or
continuous, and they play a crucial role in
statistical modeling as they help quantify
and analyze uncertainty.
Probability distributions describe the possible outcomes and their
associated probabilities for a random variable. Common probability
distributions used in statistical modeling include the normal distribution,
binomial distribution, Poisson distribution, and exponential distribution.
These distributions provide mathematical models to represent the
behavior of random variables and data.
In statistical modeling, data is often
collected from a sample to make
inferences about a larger population.
Sampling techniques ensure that the
sample is representative of the
population. Estimation methods, such as
point estimation and interval estimation,
allow us to estimate unknown population
parameters based on sample data.
Hypothesis testing is a statistical technique used to make decisions or
draw conclusions about a population based on sample data. It involves
formulating a null hypothesis and an alternative hypothesis, conducting
statistical tests, and determining the statistical significance of the results.
Regression analysis is a statistical modeling technique used to examine
the relationship between a dependent variable and one or more
independent variables. It helps identify the strength and direction of the
relationship and allows for prediction and inference.
Statistical modeling involves assessing the goodness of fit and validity of
the model. Various techniques, such as residual analysis, goodness-of-fit
tests, and cross-validation, are used to evaluate the model's performance
and determine its reliability.
Regression analysis is a statistical method used to
examine the relationship between a dependent variable
and one or more independent variables. It aims to
determine how changes in the independent variables
affect the dependent variable. Regression models help
in understanding the direction, strength, and
significance of the relationship.
 Key concepts in regression analysis include:
 Dependent Variable
 Independent Variables
 Regression Equation
 Coefficients
 Residuals

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Model diagnostics and evaluation are essential
steps in the process of statistical modeling. They
involve assessing the performance, validity, and
reliability of the models created.

Key aspects are:

 Residual Analysis
 Goodness of Fit
 Validation and Cross-Validation
 Overfitting and Underfitting
 Sensitivity Analysis
 Model Comparison