Introduction

Econometrics is the application of statistical tools to answer economic questions using data. It helps identify relationships between variables, test hypotheses, and estimate the impact of policies, pricing, or market changes. The field supports decisions in government, business, and finance by quantifying how one factor affects another in real-world settings.

Econometrics is the craft of turning data into decisions. This overview breaks down the three primary data types used in applied econometric work—cross-sectional, time series, and panel data—and demonstrates how each enables specific kinds of analysis, from estimating causal effects to forecasting future outcomes.