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 ?
Based on the complete survey of Russian airlines that was conducted in winter of 2006-2007, we analyzed essential entry-barriers in the industry, evaluated the impact of division of vertically integrated structures ("airport-airline") on regional passenger welfare, and econometrically estimated efficiency of methods for overcoming entry-barriers in the Russian PAI.
In a seminal paper, Roll (1977) contends that, irrespective of how an index is structured econometrically, it is impossible to construct a market index that will include all the assets in the universe.
This pattern also shows up econometrically: central banks with inflation targeting have significantly less persistence of inflation after shocks than those without it.
Just as they do in rational expectations models, the cross-equation restrictions that emerge out of models with boundedly rationality and learning provide potentially powerful channels through which key parameters can be econometrically identified and through which key hypotheses can be econometrically tested.
To capture dynamic relationships in the data that are not modelled by his simple equations, he imposes an econometrically estimated structure on the disturbances to the model.
The distinction of Lucas's work is that it is based on new (mathematical) techniques coupled to GE theory and is testable econometrically. In Lucas we see the final marriage of the micro theory of neoclassicism, based on the abstract rational agent, and macro theory.
The updated forecasts also take into account the potential effects of a war with Iraq Such effects have been measured econometrically for each market and segment, based on the Gulf War experience of 1991, and have been applied to the lodging demand forecasts for the 2nd quarter of 2003.
The familiar own price elasticity of demand equation [eta] = %[DELTA]Q/%[DELTA]P can be rewritten econometrically as:
The authors construct a computable general equilibrium model that is then estimated econometrically. They present two separate empirical analyses.
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).
In fact, this is the only criticism of the book that might be leveled by those accustomed to more econometrically sophisticated academic research.
This study focuses on learning and errors by analyzing data econometrically in a logistic error model.