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From cause to effect and from effect to cause
Authors:V V Shvyrkov
Institution:1. Sonoma State University, School of Business and Economics, 94928, Rohnert Park, CA, USA
Abstract:The theory of probability employs a deductive method of thinking which traces effect from cause. Statistics uses an inductive method of thinking and tries to trace cause from effect. This noble goal can be successfully achieved if and only if a researcher deals with a homogeneous data set. A homogeneous data set is generated logically and then it is to be tested statistically. The homogeneity principle bridges the gap between probability theory and applied statistics and makes statistics as precise as the theory of probability. In this role statistics opens new horizons for estimating parameters when the central limit theorem is not applied.
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