Econometrics: Method and Application

One month has gone since my last story, I couldn’t start a new Mooc because I had to focus on my many project-to-submit for the university.

After couple of months of study I improved my programming skills in R, Python and SAS but I also had a great introduction to Machine Learning through the edX Mooc: Analytical Edges.

The next three months will be focused on improving my maths skills (linear algebra and probability) but also understand how Econometrics work. That’s why I decided to enroll into this Coursera Mooc: Econometrics: Method and Application from the Erasmus University of Rotterdam.

Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships.

The Mooc is divided in six modules. To understand those six modules, I will take as example the prediction of number of airplane passengers worldwide for next year.

Module 1: Simple Regression=>one explanotary factor

Does the worldwide economic growth has an impact on the number of airplane passengers?

Module 2: Multiple Regression=>several explanotary factors

Does oil prices, price of tickets or airport taxes has an impact on the number of airplane passengers?

Module 3: Model Specification=>which factor to choose and use

Module 4: Endogeneity=>deal with reverse causation

If world growth increases air traffic, does air traffic increases world growth?

Module 5: binary choice=>microlevel of individual decision where outcome is yes or no

Module 6: Time Series=>analyse trends and cycle over time.

Let’s dive into it!