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Statistics in economics?
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Econometrics is the use of statistics on samples to derive the values of economic relationships (or any relationship between variables). Econometrics is a tool for the modern science of economics. In the days of: Keynes, Hayek, Marx, Pigou, Marshall, economics was essentially hand waving. People made claims about how the economy worked without using mathematical models - this meant theories could not be falsified. Modern day economics is about developing mathematical models which produce quantitative results - which can then be tested. The techniques of econometrics have been developed to test the results of models and deal with the problems that arise from economic data (namely that variables cannot be fixed).
A very important part of econometrics is hypothesis testing. So things like confidence intervals, significance levels are very relevant to metrics. Probability distributions are also very important as well - for both testing hypotheses and developing statistics.
A very important part of econometrics is hypothesis testing. So things like confidence intervals, significance levels are very relevant to metrics. Probability distributions are also very important as well - for both testing hypotheses and developing statistics.
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(Original post by Gcseboy1997)
Thanks! Do you know how/ whether things like the poisson distribution/ normal distribution are used in undergrad econometrics?
Thanks! Do you know how/ whether things like the poisson distribution/ normal distribution are used in undergrad econometrics?
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(Original post by Gcseboy1997)
how is it used in econometrics?
how is it used in econometrics?
The other key thing about the norm dist is that when you take averages from any distribution, and you plot the averages, they will converge to a normal distribution. From this result you can find out various properties of the original distribution.
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