Chapter 19
Ten Common Mistakes in Applied Econometrics
In This Chapter
Remembering to use economic theory in econometric analysis
Examining your analysis objectives
Using the data appropriately and avoiding unnecessary complications
Preventing conclusions that aren’t warranted by the results
It’s no coincidence that you have to take introductory economics, intermediate economic theory, and statistics courses before taking econometrics courses. Avoiding mistakes when you do econometric analysis depends on your ability to apply knowledge you acquired before and during your econometrics class. However, when you’re focusing on the technical skills that you have to master to use econometrics, you may lose sight of some of the basic elements that characterize sound econometric analysis. You can use this chapter’s rundown of common pitfalls to help you improve your application of econometric analysis.
Failing to Use Your Common Sense and Knowledge of Economic Theory
One of the characteristics that differentiate applied research in econometrics from other applications of statistical analysis ...
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