What Is an Econometric Model?

The econometric model uses section data as the sample data of the econometric model. The following issues should be noted. The first is the consistency between the sample and the mother. Estimation of parameters of econometric models, mathematically speaking, is to estimate the parameters of the mother by using a sample of individuals randomly selected from the mother, so the mother and the individual must be consistent. For example, to estimate the production function model of a coal enterprise, the data of the coal enterprise can only be used as a sample, and the data of the coal industry cannot be used. Then, the cross-section data is difficult to estimate for some aggregate models. For example, if the production function model of the coal industry is established, it is impossible to obtain appropriate cross-section data.

Econometric Model

Econometric models use section data as

Econometric models include one or more stochastic equations, which concisely and effectively describe and summarize the quantitative characteristics of a real economic system, and reveal the laws of quantitative change of the economic system more profoundly. Is by the system or

Design of theoretical models

In-depth analysis of the economic phenomena to be studied, according to the purpose of the study, the factors to be included in the model are selected, and appropriate variables are selected to characterize these factors based on the availability of data, and displayed based on economic behavior theory and sample data The relationship between variables is a mathematical model that describes the relationship between these variables, that is, a theoretical model. The design of the theoretical model mainly consists of three parts: selecting variables, determining the mathematical relationship between the variables, and formulating the numerical range of the parameters to be estimated in the model.

From the above steps of establishing an econometric model, it is not difficult to see that there are three essential factors for the success of any econometric study and any econometric model: theory, method and data.

Theories, that is, economic theories, and behavioral theories of the economic phenomena being studied, are the basis of econometric research.

Econometric Model

Methods, mainly including model methods and calculation methods, are tools and methods of econometric research, and are the main characteristics of econometrics that are different from other branches of economics.

Data, which reflects the level of activity, interrelationships and external environment of the research object, or more broadly, information, is the raw material of econometric research. All three are indispensable.

In general, in the study of econometrics, the study of methods is the focus of attention, and the level of methods often becomes the main basis for measuring the level of research results. this is normal. The study of econometric theory and methods is an incumbent obligation of econometric researchers. However, we must not neglect the discussion of economic theory. A person who does not understand economic theory and economic behavior cannot engage in econometric research, and it is impossible to establish an extremely simple econometric economy. Learning model. Therefore, an econometrician should first be an economist. In contrast, people pay less attention to data, especially data quality issues. When applying for a research project or reviewing a research result, there is no serious consideration of the availability, usability, and reliability of the data; When problems arise during the research process, it is rare to find the cause in terms of data quality. The reality is that data has become an important issue restricting the development of econometrics.