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statistical methods

Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships.[1]More precisely, it is “the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference”.[2] An introductory economics textbook describes econometrics as allowing economists “to sift through mountains of data to extract simple relationships”.[3] The first known use of the term “econometrics” (in cognate form) was by Polish economist Paweł Ciompa in 1910.[4] Jan Tinbergen is considered by many to be one of the founding fathers of econometrics.[5][6][7] Ragnar Frisch is credited with coining the term in the sense in which it is used today.[8]

A basic tool for econometrics is the multiple linear regression model.[9] Econometric theory uses statistical theory and mathematical statistics to evaluate and develop econometric methods.[10][11] Econometricians try to find estimators that have desirable statistical properties including unbiasednessefficiency, and consistencyApplied econometrics uses theoretical econometrics and real-world datafor assessing economic theories, developing econometric models, analysing economic history, and forecasting.