How Math, Science and Econometrica Helps
I was never a science and math person. But as I decided to earn my living by running my own business. I had to learn the subjects. You cannot do business without learning economics, science or math in this much needed subject. Econometrica made this process of learning extremely simple for me. Some people don’t know what I am talking about. Econometrica is a peer-reviewed economic journal that publishes articles. They are about different aspects of economics, mostly econometrics.
Now, I can call myself a reasonably successful businessman. Thanks to the knowledge I gained about econometrics. Reading the articles published on Econometrica has helped a lot.
The first thing that my knowledge of econometrics allowed me to do
Econometrics is also used widely to estimate the effects of immigration on the native workers. It’s a known fact that immigration is capable of solving issues, like shortage of workers for instance. Hence, according to the standard theories of economics, immigration decreases equilibrium wages or every worker. Still, econometrics provides a different point of view. As immigration might also have some positive demand effects. Econometrics-based estimates would be required for determining the overall effects of immigration on the laborer market.
Econometrics taught me to identify different factors affecting the entry. As well as the exit of businesses into a particular market. Market power and firm concentration has always remained two of the major concerns. Of an industrial organization’s microeconomic field. According to math, science and the basic theory of econometrics. There is a range of factors including fixed costs of entry or exit. Plus, existing levels of profit, government regulations, etc. This can have a strong impact on the market structure.
The econometric estimations assist in determining which of the above mentioned factors. Which would play the most significant role for entry/exit of the business.
When I began my journey as a business owner
One of my primary concerns was learning the minimum-wage laws. That is primarily because I knew the success of my business would always depend on how I treat my laborers. Econometrics enlightens us about several aspects of minimal wage laws; Including the effects of these laws on employment levels. Minimum wage is actually an example of price floor. If the minimum wage is high, it’s most likely that there would be surplus of labors.
This means the level of unemployment would increase. Effects of minimum wage and other price floors. It all depends largely on the shapes of supply curves and demand. The majority of the labor economists prefer using econometric techniques. This is for estimating actual effects of those policies.
The theories of econometrics allowed me to understand the relationship between work productivity and management techniques. There are certain high-performance working methods. (Examples include flexible working schedules, worker autonomy, and a range of policies formed for keeping workers happy). This has gained significant popularity among managers in the past few decades. I am also a big fan of those methods, personally. However, econometrics teaches us not to get carried away. Thus saves us from incurring big losses.
According to modern econometric theories
There are certain times when the expenses of implementing high-performance work policies might exceed productivity benefits. However, the good news is that there are econometric models that one can use. for determining the policies capable of offering maximum returns. As well as improving managerial efficiency. As a result of checking every issue of Econometrica, I could get well-acquainted with the most effective models among them.
Articles published on Econometrica also allowed me to have a clear idea about the link between individual health outcome along with insurance coverage. A common argument put forward for supporting the need of increasing the affordability and availability of medical insurance policies. This tends to be extremely important to reduce medical expenses. As well as enhance health outcomes. It’s very common for the health economists to use the combination of aggregate data. Econometric models for determining health outcomes as well.