What does a Econometrician do?
An econometrician is an economics expert who uses statistics and detailed mathematical equations to understand and predict situations. He or she analyzes data about employment, supply and demand, inflation, company profits, and many other important economic topics. By applying rigorous statistical techniques to real-world data, an econometrician is able to produce highly accurate, objective results. Econometricians are employed in many settings, including government offices, real estate companies, consulting firms, and large corporations.
In most real-world situations, dozens or even hundreds of variables can contribute to the current economic state of affairs. Econometricians carefully identify and control as many variables as possible in an attempt to identify causal relationships. For example, if an econometrician wants to create a model that predicts changes in consumers spending in a given city, he or she would have to account for many points. The expert would consider historical spending statistics, recent unemployment and job growth rates, supply data, inflation changes, and average worker wages.
Using proven quantitative methods and careful equations, the econometrician can discover spending trends and explain hypothetical situations if one or more variables are changed. He or she can determine the relationship between two of the variables by utilizing a statistical technique called regression analysis. The professional gathers a large sample set of data, inputs values into a regression equation, and graphs the resulting points. The graph is used to predict how changes to one variable will affect a different, dependent variable.
An econometrician who works for a local, regional, or national government agency may consult lawmakers about public policy decisions, such as setting minimum wage, adjusting tax rates, and implementing stimulus plans. Professionals who are employed by private corporations and consulting firms are responsible for quantifying information about sales, production rates, and customer needs. Some skilled econometricians decide to become professors at universities, where they can teach courses in statistics, economic theory, mathematics, and business administration.
Most professional econometricians hold advanced degrees in economics or statistics. A few schools even offer degrees specifically in econometrics. A master's degree is usually the minimum requirement to work as a government official, while university professors, business advisers, and consultants typically need doctoral degrees. New econometricians usually begin their careers as interns or assistants to other researchers to gain supervised experience. With time and proven skills, professionals are allowed to begin working independently to formulate theoretical models and conceive practical applications of economics research.
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