ECON 122A Lecture Notes - Lecture 1: Econometrics, Dependent And Independent Variables, Continental Drift
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In each of these examples, there is a dependent variable, which is the outcome of interest (student"s performance, health, revenue, wages, liquor consumption etc. Independent variables are denoted by x1 , x2, , xk. For example, in examining the partial effects of education and experience on wage, we have one dependent variable or outcome of interest, wage, and two independent variables, education and experience (both measured in years). One fundamental goal of econometrics is to measure economic relationships. Field experiments in social science: costly; unethical; technical implementation problems. Small-scale lab experiments or field experiments in development economics are possible and are becoming more popular nowadays. Example: determining the effects of college education on wages or the effects of mother"s cigarette smoking on birth weight. Measuring economic relations requires data, so need to know what kinds of data are available. Data based on their nature and structure can be classified into four big categories:
