Chapter

The error term and its interpretation in structural models in econometrics

Damien Fennell

in Causality in the Sciences

Published in print March 2011 | ISBN: 9780199574131
Published online September 2011 | e-ISBN: 9780191728921 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199574131.003.0017
The error term and its interpretation in structural models in econometrics

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This chapter explores what the error term represents in structural models in econometrics and the assumptions about the error terms that are used for successful statistical and causal inference. The error term is of particular interest because it acts as a coverall term for parts of the system that are not fully known about and not explicitly modelled. The chapter attempts to bring some of the key assumptions imposed on the error term for different purposes (statistical and causal inference) and to ask to what extent the conditions imposed on the error term can be empirically tested in some way.

Keywords: error term; econometrics; structural models; causal inference

Chapter.  8117 words. 

Subjects: Logic

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