Industry/Market Focus:

Government

Content Type:

Glossary

Econometrics Definition

The application of statistical and mathematical methods in the field of economics to test and quantify economic theories and the solutions to economic problems.

Econometrics is the application of statistical and mathematical methods that test and quantify economic theories and the solutions to economic problems. What’s more, its methods analyze and quantify relationships between various economic and marketing variables. Econometrics relies on data to build models that can assess the impact of marketing strategies, consumer behavior, pricing and advertising, among other factors. Econometrics brings rigor and objectivity to marketing research by isolating the impact of marketing variables while controlling for other influences. This process is key in marketing reasons because outcomes usually are influenced by multiple factors. Econometric models quantify the relative significance of each factor.

Who relies on econometrics?

Marketing professionals, researchers and businesses use econometric models to assess the performance of marketing campaigns of their campaigns, allocate budgets and optimize pricing. Econometric techniques can also uncover insights about consumer preferences and behaviors.

Why should I care about econometrics?

Understanding econometrics is key to strategic decision-making. Its methods go beyond intuition and gut feelings to permit marketing professionals and businesses to base decisions on solid data analysis. Econometrics helps avoid misleading conclusions and supports evidence-based strategies.