A variety of methods are used in
econometrics
Econometrics is the application of Statistics, statistical methods to economic data in order to give Empirical evidence, empirical content to economic relationships.M. Hashem Pesaran (1987). "Econometrics," ''The New Palgrave: A Dictionary of ...
to estimate
models
A model is an informative representation of an object, person or system. The term originally denoted the plans of a building in late 16th-century English, and derived via French and Italian ultimately from Latin ''modulus'', a measure.
Models c ...
consisting of a single
equation
In mathematics, an equation is a formula that expresses the equality of two expressions, by connecting them with the equals sign . The word ''equation'' and its cognates in other languages may have subtly different meanings; for example, in ...
. The oldest and still the most commonly used is the
ordinary least squares
In statistics, ordinary least squares (OLS) is a type of linear least squares method for choosing the unknown parameters in a linear regression model (with fixed level-one effects of a linear function of a set of explanatory variables) by the prin ...
method used to estimate
linear regression
In statistics, linear regression is a linear approach for modelling the relationship between a scalar response and one or more explanatory variables (also known as dependent and independent variables). The case of one explanatory variable is call ...
s.
A variety of methods are available to estimate
non-linear
In mathematics and science, a nonlinear system is a system in which the change of the output is not proportional to the change of the input. Nonlinear problems are of interest to engineers, biologists, physicists, mathematicians, and many other ...
models. A particularly important class of non-linear models are those used to estimate relationships where the
dependent variable
Dependent and independent variables are variables in mathematical modeling, statistical modeling and experimental sciences. Dependent variables receive this name because, in an experiment, their values are studied under the supposition or demand ...
is discrete,
truncated or censored. These include
logit
In statistics, the logit ( ) function is the quantile function associated with the standard logistic distribution. It has many uses in data analysis and machine learning, especially in data transformations.
Mathematically, the logit is the ...
,
probit
In probability theory and statistics, the probit function is the quantile function associated with the standard normal distribution. It has applications in data analysis and machine learning, in particular exploratory statistical graphics and s ...
and
Tobit models.
Single equation methods may be applied to
time-series
In mathematics, a time series is a series of data points indexed (or listed or graphed) in time order. Most commonly, a time series is a sequence taken at successive equally spaced points in time. Thus it is a sequence of discrete-time data. Exa ...
, cross section or panel data.
External links
*
Mathematical and quantitative methods (economics)
{{econometrics-stub