Chapter 1
Econometrics: The Economist’s Approach to Statistical Analysis
In This Chapter
Discovering the goals of econometric analysis
Understanding the approach and methodology of econometrics
Getting familiar with econometrics software
Welcome to the study of econometrics! The Econometric Society, founded in 1930, defines econometrics as a field based on a “theoretical-quantitative and empirical-quantitative approach to economic problems.” This mouthful means that, at times, econometricians are mathematicians and use complex algorithms and analytical tools to derive various estimation and testing procedures. At other times, econometricians are applied economists using the tools developed by theoretical econometricians to examine economic phenomena.
In this chapter, you see that a distinguishing feature of econometrics is its development of techniques designed to deal with data that aren’t derived from controlled experiments and, therefore, situations that violate many of the standard statistical assumptions. You also begin to understand that, under these circumstances, obtaining good quantitative results depends on using reliable and adequate data as well as sound economic theory. ...
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