econometrics

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Econometrics

The quantitative science of modelling the economy. Econometric models help explain and predict variables of interest.

Econometrics

The use of mathematics to assess economic data. There are two broad subdivisions in econometrics. Theoretical econometrics uses statistics to find strengths or weaknesses of an economic model considered on its own terms. Applied econometrics, on the other hand, considers how well a model conforms to real life data. For example, one may look at average wages for those with different levels of education to determine whether or not higher education is cost effective.

econometrics

the application of statistical techniques in the analysis of economic data. Econometrics is used extensively in establishing statistical relationships between, for example, levels of national income and consumption in the economy, as a basis for formulating government ECONOMIC POLICY, and is used by firms to forecast demand for their products. See SALES FORECASTING, REGRESSION ANALYSIS.

econometrics

the discipline within economics that attempts to measure and estimate statistically the relationship between two or more economic variables. For example, economic theory suggests that consumption expenditure is a function of disposable income (C = f (Y)) or, more precisely, that consumption expenditure is linked to disposable income through the equation C = a + b.Y. For each level of disposable income, consumption can be measured and a statistical relationship established between the two variables by making numerical estimates of the parameters, a and b in the equation. Because consumption is dependent upon income, it is termed the DEPENDENT VARIABLE, whilst disposable income is termed the INDEPENDENT VARIABLE. Econometric models can have many hundreds of measured variables, linked by several hundred estimated equations, not just one, as is the case when models are constructed for macroeconomic FORECASTING purposes. See REGRESSION ANALYSIS.
References in periodicals archive ?
We test, econometrically, whether or not the global saving glut hypothesis is statistically significant (see Section III for details).
Econometrically, alcohol use is exogenous in equation 2 if it is uncorrelated with the error term [epsilon].
Such an eventuality is not formally examined in this paper, and additional sampling will be required to do so in an econometrically valid manner.
In fact, fiscal deficit has econometrically been found as the significant determinant of the variations in the current account deficit of Pakistan [Ahmed (1996)].
1995), and Podolsky and Spiegel (1998) use community level data to estimate econometrically the demand for residential waste disposal services.
The GLS approach is econometrically more satisfying because it explicitly incorporates this heteroscedasticity in the estimation process.
The choice of these four output measures was tempered by the objective of examining multiproduct cost attributes within an econometrically tractable model of the banking firm.
The Fair model econometrically estimates that if a household receives a $100 increase in disposable income, it will spend roughly $20 in the first quarter, and less than $20 in each of the next three quarters.
Econometrically, the only modification to Hamilton's procedure would be to allow the relevant dummy variables to interact with the slope coefficient in equation (26).
For example, John Abowd's paper focuses on the employer/employee interface; in particular the old and important labour economics puzzle presented by the finding that only about 40% of the cross sectional variation in earnings can be explained econometrically by differences in observed characteristics of worker themselves (education, age, sex, etc).
Interestingly (and validating common sense for those who observe airfares closely around the nation), they demonstrate econometrically that about 40 percent of the fare reductions are due to the competitive pressure from a single airline, Southwest.
Difficulties were encountered when estimating equation (6) econometrically due to two principal factors; equation (6) is a highly stylised specification for the evolution of human capital, and the data used for estimation provide insufficient information to describe adequately lifetime income dynamics.