Donald L. Koch is an economist with extensive experience and also the current president of Koch Asset Management. Prior to beginning his career, Donald L. Koch studied economics at Principia College, earning his bachelor’s degree in the subject before going on to complete his masters at Trinity College in Connecticut. One of the core areas of economics that students will encounter during their time at college is econometrics.
Econometrics relates to the practice application of mathematics, statistics, and economic theory. It is primarily used to work out how theoretical economic models can be turned into practical models that have tangible effects on the economy.
In doing this, econometricians take the qualitative statements produced by theorists in their models and develop versions that offer quantitative statements instead.
The difference between qualitative and quantitative statements is subtle but important. A qualitative statement is one that refers to a situation that can be measured with numbers. For example, saying somebody’s skin is softer after they have applied lotion it a qualitative statement.
Quantitative statements seek to bring facts and figures into the mix. Using the skin example above, a Quantitative statement would focus on the increased percentage of softness the skin has attained following the use of the lotion.
Econometricians do the same thing, only applied to economics.