quartz/content/vault/econometrics/Econometric Process.md

Econometric Process

1. Question
2. Model 'do police reduce crime?' !Excalidraw/Drawing 2021-09-01 14.07.57.excalidraw.md When there's a systematic relationship between epsilons and x, data can be misleading. E is for expectation/average Crucial assumption: E[\epsilon|\textit{condition}] = 0 for all x The Intuition is that other factors influencing y are not systematically related to x. This assumption is often suspect. !Conditional Expectations
3. Data Data Types:
   • Cross-Sectional: each obs different 'individual' ie person, city, group
   • Time Series: each observation different time period ie nanosecond, minute, day, week, year
     • about a single entitiy
   • Panel: combination of Time Series and Cross-Sectional data types. Each observation corresponds to an individual at some moment in time.
4. Estimation !Bivariate (simple) Regression Estimation