Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tommy wants to estimate Ontarios annual unemployment rate in 2019 and he will repeat this again in 2020, 2021, and so on. Tommy thinks the

Tommy wants to estimate Ontario’s annual unemployment rate in 2019 and he will repeat this again in 2020, 2021, and so on. Tommy thinks the Bayesian approach is a good idea because he can use his posterior from the previous year as the prior for the current year, but he is unsure what prior to use in 2019 and worried how it might influence his unemployment rate estimates.

Which of the following best addresses Tommy’s concerns with the Bayesian approach? Assume the data is modeled by a Bernoulli distribution.

  1. Tommy could obtain a maximum-likelihood estimate of the unemployment rate from the 2019 data and then use this estimate as a suitable 2019 prior.
  2. Tommy can confidently use a Beta distribution as 2019 prior because it is a conjugate prior for the Bernoulli distribution.
  3. 2019 prior might have a negligible impact on future unemployment rate estimates, so Tommy can confidently proceed with the Bayesian approach.
  4. If Tommy has no initial information about the unemployment rate, he can use a flat prior for 2019 and still obtain a Bayesian estimate that is similar to the maximum-likelihood estimate

Step by Step Solution

3.36 Rating (152 Votes )

There are 3 Steps involved in it

Step: 1

If Tommy has no initial information about the unemp... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Information Systems

Authors: Ralph Stair, George Reynolds

11th edition

1133629660, 978-1133629665

More Books

Students also viewed these Mathematics questions

Question

How are the square numbers embedded in Pascals triangle?

Answered: 1 week ago