Statistics vs Econometrics: What are the Differences?

 

What is Statistics?

From the Latin word "status", statistics are derived, which refers to a collection of statistics that are used to represent data related to a human interest. Statistics is a branch of applied mathematics that is concerned with collecting, analyzing, describing, and inferring conclusions from quantitative data. The information collected is then used to make decisions. Differential and integral calculus, linear algebra, and probability theory are used substantially in mathematical theories of statistics.

Financial analysts use statistical methods to evaluate, examine, and summarize huge amounts of data in a mathematical form that can be used. Statistics are used in a variety of fields, including business, social sciences, industry, psychology, and others.

What Is Econometrics?

Econometrics is a branch of economics that studies economic data using statistical and mathematical approaches. Those who work in the field of econometrics are known as econometricians.

Economists use statistical methods or tools that include regression analysis, statistical inference, frequency distributions, probability, and more to examine economic theories and hypotheses. Economists compare the results with actual data and observations after testing economic theories to forecast future economic trends.

Types of Statistics

The study of statistics can be divided into two types. These include descriptive and inferential statistics.

1. Descriptive statistics

Descriptive statistics define the basic characteristics of a population and how the data is organized. This allows analysts to recognize the characteristics of the data and make sense of it.

There are two basic forms or types of descriptive statistics that scientists use:

• Measures of central tendency 
• Measures of spread 

1. Inferential statistics

In inferential statistics, complex mathematical calculations are used to infer trends with respect to a large population. It is difficult to analyze each member of a large population one by one while analyzing a large population.

Scientists use inferential statistics, between variables in a sample population, to discover relationships and then to make predictions about how the variables relate to the total population.

The following are the two main classifications of inferential statistics:

• Confidence interval 
• Hypothesis testing

Types of Econometrics

Theoretical and applied econometrics are the two main types of econometrics.

1. Theoretical econometrics

To estimate the unknowns, this type of econometric analysis examines existing statistical techniques or tests qualities or properties. Theoretical econometricians can devise new statistical methodologies to account for anomalies in economic data. To demonstrate the feasibility of new processes, this field of econometrics focuses on numerical data, theoretical statistics and mathematics.

1. Applied econometrics

To convert qualitative statements into quantitative ones, the second type of econometrics involves techniques. It is often in response to the work of applied economeplicants who have discovered unexplained variations in data sets that theoretical economeplicists design new statistical approaches. Applied econometricians can then use these new tools to test their hypotheses.

Conclusion

The above information defines Statistics vs Econometrics effectively. And we hope that now you should know all about Statistics vs Econometrics. But if in any case, you want our help, then contact us without any hesitation. We are 24*7 available here to help you.