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stats on transitions from one state to another

On 20-02-2012, at 16:11, <Murali.Menon at avivainvestors.com> <Murali.Menon at avivainvestors.com> wrote:

            
What do you mean by previous state.
I do this
State.prev State    V1    V2
 [1,]         NA     0  0.21  0.51
 [2,]          0     2 -0.57 -1.00
 [3,]          2     2 -0.59 -1.29
 [4,]          2     2  0.16  2.15
 [5,]          2     0 -1.62  0.39
 [6,]          0     0  0.18  0.78
 [7,]          0     0 -0.81  0.85
 [8,]          0     1 -0.19  1.18
 [9,]          1     1 -0.76  1.66
[10,]          1     1  0.74  0.90
[11,]          1     1 -1.51 -0.94
[12,]          1     2  2.79 -1.29
[13,]          2     2  0.41 -0.23
[14,]          2     1  1.63 -0.92
[15,]          1     1 -0.86 -0.21
[16,]          1     1 -0.81  1.02
[17,]          1     0  0.39 -0.77
[18,]          0     0 -1.38 -0.68
[19,]          0     2  0.06 -0.33
[20,]          2     2  0.84  0.04

The mean of V1 in state 2 when the previous state is 0 would be in my interpretation

mean(c(-0.57, 0.06))
Your second case would be the mean of -1.62

Berend