Econometrics is the statistical technique used by economists to test hypotheses through the use of global data. For example, one question may be whether the gap has grown between the rich and poor this century in Indonesia. This sort of question requires analysing data that has been collected by the Indonesian government and other sources regarding income levels, buying power and the provision of funds and services provided for the country’s citizens. Mathematical methods and formulas such as used in calculus may be used to analyse statistical information.
Econometrics uses theoretical models to analyse data such as the classical linear regression model which studies the estimation and inference problems that occur in empirical economics. Computer software is used in these applications and the theoretical side of the course covers other topics such as
- Properties of estimators
- Classical linear regression model
- Illustrations of econometric problems
- Introduction to probability
- Introduction to statistical inference
- Variable regression and analysis of variance
- Some matrix algebra and classical linear regression model
These theories are necessary as a way of producing reliable results from statistics that have been collected and collated.
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