To solve Problem 5, follow these steps: ### Step 1: Simulate Data ### Step 2: Stan Model Code Write the Stan model (`bayesian_regression.stan`): ```stan data { int N; vector[N] x; vector[N] y; } parameters { real alpha; real beta; real sigma_sq; } transformed parameters { real sigma = sqrt(sigma_sq); } model { sigma_sq ~ inv_gamma(1, 1); // Prior on variance alpha ~ normal(0, 10); beta ~ normal(0, 10); y ~ normal(alpha + beta * x, sigma); // Likelihood } ``` ### Step 3: Fit the Model and Check Diagnostics Use `pystan` or `cmdstanpy` to run the model. Check Rhat (≈1) and ESS (sufficiently large). For example: ```python import cmdstanpy model = cmdstanpy.CmdStanModel(stan_file="bayesian_regression.stan") data = {"N": N, "x": x, "y": y} fit = model.sample(data=data, chains=4, iter_sampling=2000) # Check diagnostics print(fit.diagnose()) ``` ### Step 4: Analyze Results for N=100 Posterior summaries: - **Posterior means** should be close to true values (α=2.3, β=4.0, σ=2.0). - **Uncertainty**: Compute 95% credible intervals. Example output: - α: 2.1 ± 0.4 (1.7 to 2.5) - β: 3.8 ± 0.5 (3.3 to 4.3) - σ: 1.9 ± 0.2 (1.7 to 2.1) ### Step 5: Repeat with N=1000 Increase sample size and rerun: ```python N_large = 1000 x_large = np.random.normal(size=N_large) y_large = alpha_true + beta_true * x_large + sigma_true * np.random.normal(size=N_large) ``` Fit the model again. Results will show: - **Tighter credible intervals** (e.g., β: 3.95 ± 0.1). - Reduced posterior variance, indicating higher precision. ### Key Observations: 1. **Accuracy**: Posterior means align closely with true parameters. 2. **Uncertainty**: Credible intervals narrow as \(N\) increases, reflecting reduced uncertainty. 3. **Diagnostics**: Ensure Rhat ≈1 and sufficient ESS for reliable inferences. **Visualization**: Plot prior vs. posterior histograms for parameters (using tools like `arviz` or `seaborn`), showing posterior concentration around true values, especially for \(N=1000\). --- **Answer for LMS Submission** Implement the steps above, ensuring your write-up includes code snippets, diagnostic results, and graphical comparisons. Highlight the reduction in posterior variance when increasing \(N\), demonstrating the influence of data quantity on Bayesian inference.