The study of econometric s has become an essential part of every undergraduate course
in Economics and it is not an exaggeration to say that it is also a very essential part
of every economist's training. This is because the importance of applied economics is
constantly increasing while the quantification and evaluation of economic theories and
hypotheses constitutes now, more than ever, a bare necessity. Theoretical economics
may suggest that there is a relationship among two, or more, variables but applied
economics demands both evidence that this relationship is a real one, observed in
everyday life, and quantification of the relationship between the two variables as well.
The study of the methods that enable us to quantify economic relationships using
actual data is known as econometric. •
Literally, econometric means 'measurement (which is the meaning of the Greek
word metrics) in economics'. However, in essence, econometric include all those
statistical and mathematical techniques that are utilised in the analysis of economic
data. The main target of using these statistical and mathematical tools in economic
data is to attempt to prove or disprove certain economic propositions and models
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