Intro to Probability for Business
Independence of observations refers to the condition where the data collected from one observation does not influence or affect the data collected from another observation. This concept is crucial in statistical analyses as it ensures that each data point contributes uniquely to the overall results, allowing for valid inferences and conclusions. When observations are independent, it means that the occurrence or value of one observation does not provide any information about another, which is important for the validity of various statistical tests.
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