Skip to main content

What is econometrics? An intuitive overview

Published on September 30, 2026   7 min

A selection of talks on Finance, Accounting & Economics

Please wait while the transcript is being prepared...
0:00
Welcome, everyone. My name is Alessio Volpicella. I'm an associate professor of economics at the University of Pavia, and I will guide you through these short videos about an introduction to econometrics.
0:19
Econometrics basically means blending economics, data, and statistics. What we're going to try to do today is to motivate why that's useful with real-world examples, and we're going to try to explain the main goal of econometrics using data, using evidence to test economic theories.
0:47
The basic idea of econometrics is blending economic concepts and theory, data, and statistical tools. The main goal is to use data to test economic theories and quantify relationships across any economic variables you may be interested in, and the tool to make economic theories meet data is exactly statistics. Let me give you a few examples. For example, we can wonder how price affects demand; whether a fiscal policy increases employment. To address those questions, we need econometrics. We need the statistics, data, and economic concepts.
1:40
Now, a very natural question would be: Okay, but why do we need data and statistics? Why is theory not enough? What economic theory does is basically easy to predict. For example, demand falls when prices go up. But then, of course, we need validation about what theory predicts, and that's going to be about direction. For example, is it really true that demand always falls if prices go up and if so by how much? So basically the magnitude. From that point of view, data helps decide among competing explanations. For example, does higher minimum wage reduce or increase employment?

Quiz available with full talk access. Request Free Trial or Login.

Show
Hide

What is econometrics? An intuitive overview

Embed in course/own notes