3.00 credit hours
Econometrics is the application of statistics to empirical economic analysis. One way of testing the validity of economic theories is to gather data and apply statistical tests to see if the data support the theory. These data are usually gathered by observing actual economies, firms and consumers, rather than by performing experiments in a laboratory. Because economic analysts lack the precision and control of the laboratory, they must compensate by adjusting their statistical procedures. In this class, we will concentrate on regression analysis, which is the basic tool of the economic researcher. We will study the assumptions commonly made in the application of this technique, the consequences of violating these assumptions, and the corrections that can be made. Students will have a chance to formulate and test their own hypotheses using econometric software available for personal computers. Recommended preparation: One semester of statistics or consent of instructor.