Econometrics definition, Example?

Econometrics is a branch of economics that uses statistical methods to analyze economic data and test economic theories. It combines economic theory, mathematics, and statistical techniques to quantify and analyze economic relationships.

Example: A researcher wants to study the relationship between income and consumption. They collect data on the income and consumption levels of a sample of households and use regression analysis to estimate the relationship between the two variables. The researcher finds that there is a positive and statistically significant relationship between income and consumption, indicating that as income increases, consumption also tends to increase. This is an example of how econometrics can be used to analyze economic relationships and test economic theories.