While the boundaries between economics and econometrics may overlap, there are certainly some key differences between the two that you should be aware of.
If we really want to get to the bottom of this, we need to look at what they both are, how they differ, which you should study, which is harder to study, and whether or not you might want to just consider studying a bit of both of them.
What Is Economics?
Economics is a social science that you may think is only concerned with money, but economics is actually the study of goods and services. It looks at how wealth is produced, distributed, and consumed.
As much of what we do involves producing, distributing, or consuming goods and services, the scope of economics is huge but how economists look at the world varies greatly depending on their field of expertise and their focus. Economists can look at individuals and their behaviors or entire financial systems operating at regional, national, or even global levels.
Economists can observe behaviors, phenomena, and interactions to find patterns or trends and create theories and models to better explain what they observe. They can also use these explanations to make predictions and even influence decision-making.
Due to the broad scope of economics, its teaching can also be applied to many other fields, but economists are still more likely to work in economics or in a closely-related field such as business or finance.
As the field is so broad, there are also lots of opportunities for specialization and economists could specialize in microeconomics, macroeconomics, production, specialization (which is a concept from economics), supply and demand, growth, welfare, fiscal policy, etc.
The specialization that we're most interested in today, however, is econometrics. So what exactly is it?
What Is Econometrics?
To greatly oversimplify things, econometrics is the crossroads between economics and statistics. While economics covers lots of different ways to study wealth, econometrics focuses almost purely on quantitative studies by often using large amounts of real-world data and applying statistical methods.
By observing real-world data and applying mathematical and statistical analysis, econometricians look to establish relationships between observed phenomena and build theories around them.
You could explain the goal of econometrics as to look at lots of data and come up with simple explanations, which can be very useful to economists.
It should be also noted that this is part of the criticism leveled at econometrics. By looking solely at data, econometrics can ignore other qualitative factors that may be necessary to explain observed phenomena.
Of course, the quality of the data used plays a big role here, and like with any scientific approach, the approach will vary by circumstance. There are situations and phenomena where econometric approaches can be incredibly valuable and other situations where a different specialization may be required.
Though econometrics is a branch of economics, you could also further divide econometrics into theoretical econometrics and applied econometrics.
Theoretical econometrics focuses more on taking historical data, making observations, and proposing theories that aim to explain what has been observed.
Applied econometrics looks to take econometric theories and use them to make predictions and forecasts, evaluate risk, and help with decision-making.
An econometrician would never fully focus on theoretical or applied econometrics, but it's likely that they'd prioritize one over the other depending on their career, areas of interest, or background in economics or econometrics.
What Are the Differences?
As a branch of economics, you could say that econometrics exists fully within economics. However, it might be more helpful to consider econometrics as sitting inside economics while reaching out the window into the fields of mathematics and statistics.
This doesn't mean that economists won't ever use mathematical approaches and it's very common for economists to study economic data, but it's not the only way they would necessarily look at things and they are less likely to only apply statistical or mathematical approaches to data.
An econometrician, on the other hand, has one foot firmly in the field of mathematics and statistics. While every econometrician will have some background in economics, you could also safely say that they'd feel more comfortable working with math or statistics.
You should also remember that, as in most fields of study, the borders between one discipline and another are often blurred so you'll find economists who've studied econometrics and econometricians with differing levels of expertise in other aspects of economics.
Technically, we should make it clear that an econometrician could be classified as a type of economist but an economist isn't necessarily an econometrician.
Which Should You Study?
When it comes to choosing whether to study economics or econometrics, you should think really carefully about the kind of student you are, the kinds of topics you like, and what you find easy.
This doesn't mean you should just choose the path of least resistance and pick whichever field you find the easiest, but if you've never really enjoyed math, then econometrics might be one step too far. However, you will still encounter quite a bit of math by studying economics.
Both economics and econometrics will include some mathematical components if you choose to study them and both offer excellent career prospects with a lot of the career choices overlapping.
Economic's broad reach also means that you can enjoy working in anything from big businesses to NGOs, charities, governments, or academia.
If you're considering either field, you've already made a pretty good choice because economics isn't going anywhere and it's pretty much in every aspect of our lives. Studying economics will also help you to develop a lot of transferable skills because of how it can be applied to so many different fields.
Can You Study Both?
Can't make up your mind?
That's not a problem as whether you choose to study economics or econometrics, you'll likely end up studying a bit of both.
You could choose to study economics and try to stay as far away from econometrics as you can, but your program will likely have a class or two that touches upon econometrics, math, or statistics.
If you study econometrics, pretty much all your courses will be made up of economics classes alongside math and statistics classes.
As the boundaries are quite blurred, most students will cover both areas as well as dip their toes into lots of other branches of economics. How much of each branch you choose to partake in will depend on your school, the program you're following, what you want to major in, etc.
Even if you have very little interest in econometrics, you should probably take a class or two in it as it's a fairly important part of economics and with the amount of data being created every day, it's only going to become more important in the future.
With a lot of programs, you'll also be given some time to choose whether or not you major in econometrics so there's no harm in taking classes in it first before deciding how much you want to commit to a career in it. Even if you study some econometric classes but don't choose economics as your major, the knowledge you gain from those classes will still be helpful if you decide to pursue your economics or another specialization.
Which Is Harder to Study?
When it comes to choosing what to study, the difficulty is one of the big questions. Even if you enjoy a challenge, you want to be able to complete your program and also graduate.
You'll also likely want to get good grades and may have to weigh up whether the difficulty is worth it for your future career prospects.
Keep in mind that difficulty is relative and every student is different. Different people find different things easy and a class that feels like a breeze for you could be really challenging for somebody else and vice-versa.
Whether you major in economics or econometrics, both should be of a comparable level because the qualification, your degree, is of an undergraduate level. The programs should also be at your level of education (unless you've already completed a degree program) and be somewhat challenging. After all, if you already knew everything, you wouldn't need to do the degree.
For students who've always done well in math class, econometrics will still be challenging, but not as challenging as it would be for students already struggling with high school math.
You should also know that while both should provide a rewarding challenge, help is out there, too. There are plenty of online resources to help you and there are also private tutors specializing in economics, econometrics, math, statistics, and any other field you can think of.
There are also tutors specializing in study skills and other soft skills that can help you get the most out of your classes as sometimes it's not necessarily the content of the course that's causing problems, but rather how you choose to approach it.
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