Question

Explain the interplay of Economics and Statistics in the process of an empirical work based on regression.

plz talk about

Regression stats

T test find data reliability

and their function in Bridging gap between econ and stat

Answer 1

First of all, we can say Economics and Statistics are related to each other. Without one thing, interpretation of other is incomplete. Let us consider an example, an economist says that when the price of some quantity increases than their demand decreases and vice-versa. Now, for a statistician, this statement is important. So, he will collect data over demand and price and fit a regression model to validate this statement.

Thus, it i clear that a economists use a statistical tool known as regression analysis. Regressions are used to quantify the relationship between one variable and the other variables that are thought to explain it; regressions can also identify how close and well determined the relationship is. Again, after fitting a regression model, one can test the significance of independent variable where it is really affect dependent variable or not. One can use t-test.