Introduction to Econometrics and Statistical Software

Abstract

This chapter discusses some basic steps used in econometrics and statistical software, Stata 15.1, for useful application of econometric theories with real-life data. Econometric methods are helpful in explaining the stochastic relationship in mathematical form among variables. Applied econometrics is the application of econometric theory to analyse economic phenomenon with economic data. While an economic model provides a theoretical relation, an econometric model is a relationship used to analyse real-life situation. The formulation of economic models in an empirically testable form is an econometric model. The random error or disturbance term is very much powerful in econometric analysis. One of the major tasks of statistics and econometrics is to obtain information about populations. The main aim of econometric analysis is to obtain information about the population through the analysis of the sample. Regression analysis is an important tool used in econometrics to analyse quantitative data for estimating model parameters and making forecasts. Data are the main inputs in econometric analysis. Therefore, a researcher should have a clear idea about the data.