Research Techniques in Economics
Economic research involves handling large amounts of data on consumers, firms, and government activities, using complex statistical techniques of analysis. These and other research techniques allow economists to describe economic actions, test hypotheses about economic theories, and predict future economic conditions. Economic research techniques allow economists to study price inflation, consumer behavior, economic growth, the effects of government regulations, and other topics.
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Types
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In their research, economists collect and analyze large sets of data. Sources of data include government agencies, international organizations, and financial institutions. Economists analyze the data using economic graphs, equations, and econometrics.
Identification
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Econometrics, which means "economic measurement," refers to a series of techniques for measuring and analyzing economic phenomena. These techniques require in-depth statistical knowledge.
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Features
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A primary technique in econometrics is regression analysis, a technique for modeling economic relationships. Other econometric techniques include time-series models and forecasting.
Function
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Regression analysis explains changes in a dependent variable as a function of changes in one or more independent variables. For example, a regression equation may model average income as a function of such variables as education, experience, gender, ethnicity, industry, geographic region, and others.
Other Techniques
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Time-series models use regression analysis to measure changes over time. Forecasting uses econometric techniques to predict future economic conditions.
Considerations
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Because of the complexity of econometric and other economic research techniques, economists rely on statistical software programs such as SPSS, SAS, and E-Views to analyze data.
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