ABSTRACT
This chapter introduces the discipline of econometrics. Econometrics tests theories and relationships. This distinguishes it from data mining. The econometric methodology is outlined and then used to test an economic theory. The differences between cross-sectional data, time-series data, and panel data are shown with specific examples. Ordinary least squares is introduced but the details of the technique are saved until Chapter 2. An econometric model is used to forecast. The chapter closes with a brief discussion of the many possible applications of econometrics.
