Single equation methods (econometrics)

A variety of methods are used in econometrics

Econometrics

Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. Econometrics combines economic theory with statistics to analyze and test economic relationships...

 to estimate models

Model (economics)

In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified framework designed to illustrate complex processes, often but not always using...

 consisting of a single equation

Equation

An equation is a mathematical statement, in symbols, that two things are exactly the same . Equations are written with an equal sign, as in...

. The oldest and still the most commonly used is the ordinary least squares

Ordinary least squares

In statistics and econometrics, ordinary least squares is a technique for estimating the unknown parameters in a linear regression model. This method minimizes the sum of squared distances between the observed responses in a set of data, and the fitted responses from the regression model...

 method used to estimate linear regression

Linear regression

In statistics, linear regression refers to any approach to modeling the relationship between one or more variables denoted y and one or more variables denoted X, such that the model depends linearly on the unknown parameters to be estimated from the data...

s.

A variety of methods are available to estimate non-linear models. A particularly important class of non-linear models are those used to estimate relationships where the dependent variable is discrete, truncated or censored.

A variety of methods are used in econometrics

Econometrics

Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. Econometrics combines economic theory with statistics to analyze and test economic relationships...

 to estimate models

Model (economics)

In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified framework designed to illustrate complex processes, often but not always using...

 consisting of a single equation

Equation

An equation is a mathematical statement, in symbols, that two things are exactly the same . Equations are written with an equal sign, as in...

. The oldest and still the most commonly used is the ordinary least squares

Ordinary least squares

In statistics and econometrics, ordinary least squares is a technique for estimating the unknown parameters in a linear regression model. This method minimizes the sum of squared distances between the observed responses in a set of data, and the fitted responses from the regression model...

 method used to estimate linear regression

Linear regression

In statistics, linear regression refers to any approach to modeling the relationship between one or more variables denoted y and one or more variables denoted X, such that the model depends linearly on the unknown parameters to be estimated from the data...

s.

A variety of methods are available to estimate non-linear models. A particularly important class of non-linear models are those used to estimate relationships where the dependent variable is discrete, truncated or censored. These include logit

Logit

This article discusses binary logit only. See discrete choice for a discussion of multinomial logit, conditional logit, nested logit, mixed logit, exploded logit, and ordered logit....

, probit

Probit

In probability theory and statistics, the probit function is the inverse cumulative distribution function , or quantile function associated with the standard normal distribution...

 and Tobit

Tobit model

The Tobit Model is an econometric, biometric model proposed by James Tobin to describethe relationship between a non-negative dependent variable and an independent variable .The model supposes that there is a latent...

 models.

Single equation methods may be to applied time-series, cross section or panel data.