1. Explain the relationship between econometrics, mathematics and
statistics?
Mathematical economics states economic theory on terms of mathematical
symbol. There is no difference between mathematical economics and economic
theory. Both says the same relationship but while economic theory use verbal
exposition whereas mathematical economics employ mathematical symbol.
Economic analysis starts with the use of mathematics to states economic theory
in terms of mathematical symbol. Eg : Theory of demand says that other things
remains the same, the demand for a commodity varies inversely with its price.
Mathematically it can be expressed as Q= f(P)
Thus mathematical tools helps economics to state economic theory in well-
defined form. But both express economic relationship in an exact form not allow
the space for stochastic elements. But econometrics methods are design in such
away that they take into account the random disturbances. Further it provides
numerical value for the coefficient of economic relations.
We can make use of many branches of mathematics such as algebra, matrix,
integral calculus, differential equations.
Econometrics and statistics
Econometrics differ from statistics. Statistics collect data, recorded , tabulated
and describes the pattern of development overtime. The mathematical statistics
deals with the method of measurement, but these methods are developed on the
basis of controlled experiment in laboratory. Such methods are not appropriate
for economic relationship on which the measurement on the basis of evidence
provided by controlled experiment in physics and some other science, the
researcher can hold all other conditions constant and change only one element.
But in studying economic behaviour of human being cannot change only one
factor while keeping all other factors constant. In the real world all factors are
variables.
Econometrics uses statistical method to solve the problems of economic life. The
adjustment primarily consists in specify the stochastic elements that are supposed
to operate in the real world. Various statistical methods can be used in
econometrics analysis including regression, correlation, measures of central
tendency, testing pf hypothesis etc.
2. Explain F test?
It is most often used when comparing statistical models that have been fitted to
a data set, in order to identify the model that best fits the population from which
statistics?
Mathematical economics states economic theory on terms of mathematical
symbol. There is no difference between mathematical economics and economic
theory. Both says the same relationship but while economic theory use verbal
exposition whereas mathematical economics employ mathematical symbol.
Economic analysis starts with the use of mathematics to states economic theory
in terms of mathematical symbol. Eg : Theory of demand says that other things
remains the same, the demand for a commodity varies inversely with its price.
Mathematically it can be expressed as Q= f(P)
Thus mathematical tools helps economics to state economic theory in well-
defined form. But both express economic relationship in an exact form not allow
the space for stochastic elements. But econometrics methods are design in such
away that they take into account the random disturbances. Further it provides
numerical value for the coefficient of economic relations.
We can make use of many branches of mathematics such as algebra, matrix,
integral calculus, differential equations.
Econometrics and statistics
Econometrics differ from statistics. Statistics collect data, recorded , tabulated
and describes the pattern of development overtime. The mathematical statistics
deals with the method of measurement, but these methods are developed on the
basis of controlled experiment in laboratory. Such methods are not appropriate
for economic relationship on which the measurement on the basis of evidence
provided by controlled experiment in physics and some other science, the
researcher can hold all other conditions constant and change only one element.
But in studying economic behaviour of human being cannot change only one
factor while keeping all other factors constant. In the real world all factors are
variables.
Econometrics uses statistical method to solve the problems of economic life. The
adjustment primarily consists in specify the stochastic elements that are supposed
to operate in the real world. Various statistical methods can be used in
econometrics analysis including regression, correlation, measures of central
tendency, testing pf hypothesis etc.
2. Explain F test?
It is most often used when comparing statistical models that have been fitted to
a data set, in order to identify the model that best fits the population from which
