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Jul 13, 2008

Why Econometrics?

Hi,

People who are new to this field/subject might be of doubt what it is and why we need it.

Let me put things simply. Econometrics is Mathematical/Statistical application to the empirical estimation of many economic scenarios/economic theories existed. A simple and very common one is what happen if price of crude oil burst to $200. Its effect is only on gasoline consumption or on total economy. Is this thought raising?

An Economist with the help of Econometrics gives a solution given economic conditions of the State.

Now, coming Why Econometrics?

General Economics usually carries a blame being not scientific and consider it as one of social sciences. Econometrics being a major branch (in recent past) or lets say better economics, is scientific (since empirical) and practical.

Hence, Econometrics now-a-days is a considered as a scientific approach for many to get statistical evidence for descriptions of the economic scenarios. And widely Statesman look at these Econometricians for their prescriptions for any economic policy problem.

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