Lesson 7
Probability basics
Big question
How do we talk about uncertainty in a disciplined way?
Lesson progress
Complete checkpoints as you learn
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Big question
Concept
Activity
Quiz
Learning objectives
- Explain probability basics in plain language.
- Use event correctly in an interpretation.
- Connect the lesson idea to a formula, graph, Python result, or real example.
Simple explanation
Probability gives numbers to uncertainty. It helps us describe events, compare risks, and understand why samples can differ from the full population.
Key terms
- Event
- An outcome or set of outcomes we care about.
- Probability
- A number from 0 to 1 that describes how likely an event is.
- Complement
- The event that something does not happen.
- Independence
- Two events are independent if one happening does not change the probability of the other.
Complement rule
Example
If the probability of being employed is 0.92, the probability of not being employed is 1 - 0.92 = 0.08.
Checkpoint activity
Pause and explain this lesson's main idea in your own words before moving forward.
Try it yourself
Write one plain-English sentence explaining the main idea from this lesson.
Common mistakes
Check these before you move on.
A regression coefficient describes a pattern unless the assumptions or research design support a causal interpretation.
Quick quiz
What does a probability of 0 mean?
Key takeaway
Probability is the language econometrics uses to handle uncertainty.