What is econometric research?

Answer 1

Econometrics research is basically research that employs statistical techniques and economic theory to quantify, analyze and test relationships between two or more variables.

Much of the time regression analysis is used to perform the research.

Say you have a data set consisting of 100 observations with two variables... Income and "Weekly Family Food Expenditure"...

Economic theory would tell you that as income increases the weekly food expenditure should increases as well, but often times that's not enough... you want to confirm that and then tell by how much and perhaps you want to know if the increase is constant at all levels. You may even want to predict what someone's food expenditure will be given their weekly income.

Through statistical and econometric techniques you'll be able to construct a model and determine how accurate it is with a certain level of confidence. You can use that model to predict food expenditures at different levels of income, measure if the increase in food expenditure that you suppose to occur with increased income is constant at all levels, determine how much of the food expenditure is described by income or if there are other variables that if added to the model might help to explain it better and much more.

Kevin