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Mathematics

The Delta Method for Approximating Distributions of Statistics

Quick fact

The delta method uses just the first derivative of a function to turn a nonlinear function of a sample statistic into a linear approximation, instantly giving you the standard error for functions like exp(mean), log(mean), or a ratio of coefficients.

Why this is interesting

You know the mean of your data and you can compute its standard error. But what if you need the standard error of the square of the mean, or the logarithm of the mean? The rules get tricky—but there's a powerful trick that makes it easy.