Answer to Question #217099 in Microeconomics for Unknown346144

Question

1.     What are the steps (methodology) that we need to follow in econometric analysis?

Answer 1

1. Define the hypothesis or statement of theory.
2. Specify the mathematical theory model
3. Specify the econometric or statistical model
4. Obtain the necessary data
5. Estimate the econometric model parameters
6. Test the hypothesis
7. Make a prediction (Forecasting)
8. Use the model for policy or control purposes.