Why does econometric models usually have higher accuracy than using other method, show one example with references that shows this?

Why this is happening while all these economics method is using economics models?

  • 3
    $\begingroup$ What other methods do you exactly mean? In econometrics you do use economic models, only you estimate the parameters instead of assuming them. $\endgroup$
    – Giskard
    Dec 17 '15 at 8:02
  • $\begingroup$ was this question created by a bot or by an actual human? what type of econometrics are we talking about (frequentist, bayesian, ...)? What else than economics method (sic!) should an economic model use? $\endgroup$ Dec 17 '15 at 9:01
  • $\begingroup$ This question needs editing for sure but it is not without interest. @crunchbangax the OP is talking about "econometric" method not about economics method per se. $\endgroup$
    – emeryville
    Dec 17 '15 at 16:20

Which "other method" have you in mind? Case studies? Surveys? Graphical evidence?

Since most economic questions are ceteris paribus by nature, econometric models help holding other factors fixed. A key question in most empirical studies is: Have enough other factors been held fixed to make a case for causality?

The number of factors that can affect a variable of interest—such as individual wages—is immense, and the isolation of any particular variable may seem like a hopeless effort. However, when carefully applied, econometric methods can simulate a ceteris paribus experiment.

For instance, you may run individual wages on education controlling for gender, experience, tenure, age, ... etc.

A good starting reference for studying econometrics is Introductory Econometrics by Jeffrey Wooldridge


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