The Methodology of Econometrics

Abstract

‘Economics’, says Alfred Marshall, ‘is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing.’† It is concerned with the study of man’s behaviour in society and so it is classed as one of the social sciences. Indeed most social scientists would concede that economics is the most advanced of all disciplines which study man’s behaviour in society. Compared with other social scientists, one of the main advantages enjoyed by the economist is that he deals with phenomena which are normally measurable. He can easily measure the weight of coal consumed by households; but the sociologist, for example, finds it almost impossible to quantify the concept of social class.