Background: The statistical approach is usually applied for the description of electromagnetic decay of the nucleus with the exception of the lowest excitation energies as well as for the calculation of the interaction of photons with nuclei, in particular the reaction cross sections. This concept employs nuclear level density (NLD) and photon strength functions (PSFs).Purpose: While PSFs and NLD of some well-deformed rare-earth nuclei were measured by several methods, sometimes with conflicting results, the PSFs of $^{168}\mathrm{Er}$ were addressed only by $(\ensuremath{\gamma},{\ensuremath{\gamma}}^{\ensuremath{'}})$ experiments. On the other hand, the low-lying levels of $^{168}\mathrm{Er}$ are well studied, including the isomeric state at 1094 keV, which enables various tests of the statistical approach.Methods: The $\ensuremath{\gamma}$ rays following radiative neutron capture on a $^{167}\mathrm{Er}$ sample were measured with the highly segmented $\ensuremath{\gamma}$-ray calorimeter Detector for Advanced Neutron Capture Experiments at the Los Alamos Neutron Science Center. The $\ensuremath{\gamma}$-ray energy spectra for different multiplicities (multistep cascade, or MSC, spectra) were gathered for many $s$-wave resonances of both possible spins. Moreover, we were able to detect the decay of the short-lived isomer and deduce the isomeric ratio for a few resonances.Results: Analysis of the MSC spectra within the statistical model enabled us to draw conclusions about dipole PSFs, in particular on the properties of the scissors mode, and NLD. The spectra can be well reproduced with phenomenological PSFs models but not with any of several models based on quasiparticle random-phase approximation (QRPA) calculations with different interactions. We showed that nonstatistical effects in feeding of the isomeric state play a role up to excitation energies of at least about 2 MeV.Conclusions: Deduced parameters of the scissors mode were found to be similar to those of neighbor well-deformed even-even Gd and Dy nuclei. Models like that of Kadmenskij, Markushev, and Furman (KMF) or like the modified generalized Lorentzian (MGLO) model provide a good description of experimental spectra. In contrast to several previous analyses of well-deformed rare-earth isotopes, we were able to match the experimental isomeric ratio with statistical model simulations.
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