Statistical Modeling and Decision Making

In this course, we will learn about statistical modeling as an approach to making decisions under limited information. Statistical modeling allows us to express what we do and don’t know about a problem, to estimate and predict unknown quantities, and use those estimates to make informed decisions. Broadly, we will spend the first third of the course reviewing the fundamentals of probability theory, which is necessary to understand the “main” topics of the course. We will then spend the majority of the course focused on empirical estimation: that is, how to learn statistical quantities (e.g., the distribution of a variable) from observed data, including parametric modeling and regression. Throughout the course, both through in-class examples and problem sets, we will emphasize business-relevant examples and practice interpreting the business implications of statistical results.