Fair lending analysis is becoming increasingly technical, which means a basic understanding of statistics is becoming increasingly important. This video is the first in a series of videos aimed at refreshing your memory on – or perhaps teaching you for the first time – statistical concepts that are fundamental to fair lending analysis.
We begin by addressing the question, “What is a distribution?” Understanding the answer to this question is fundamental to understanding statistical inference. In other words, to understand common terms like statistical significance, T scores, Z scores, or p-values, you must first understand what is a distribution.
In the next video of the series, we will cover more precisely how we actually use what we know about a distribution to infer some conclusions about the relation between the protected class and the price of a loan.