Answer to Question #312863 in Microeconomics for pawah

Question

b) With proper examples draw a distinction between mathematical and econometric model?

Answer 1

Econometric model is obtained from economic data with the help of statistical techniques. These models are usually based on economic theories that assume optimizing behavior on the part of economic agents.

• Linear regression.
• Generalized linear models.
• Probit.

Mathematical model on the other hand is the is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling

They include the analytical, empirical and simulation tools.