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Methods of Quantitative Economics

Friday, September 25, 2009
 

Instructions

Identification

  • Step 1:
    The field of quantitative economics is known among economists as econometrics, which literally means economic measurement.

Types

  • Step 1:
    The main analytical method of quantitative economics is regression analysis, which studies economic outcomes as functions of one or more predictor variables. For example, a regression equation might analyze the extent to which average income is predicted by the following predictor variables: experience, education, gender and ethnicity. Other quantitative economic techniques include cost-benefit analysis and economic forecasting.

Features

  • Step 1:
    Quantitative economic methods require an in-depth knowledge of statistics and research methodologies. They also require extensive amounts of data, as well as a computer and statistical software for analysis.

Benefits

  • Step 1:
    Quantitative economics not only lends empirical support to economic theory, but also can forecast economic conditions, evaluate the impact of economic policies, examine the feasibility of government or business decisions, and analyze market conditions for business.

Considerations

  • Step 1:
    Quantitative economic techniques can find correlations between variables, such as income and education, but do not prove causation.

Resources


Methods of Quantitative Economics Provided by eHow.com
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