Econometrics is "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.An influential introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships. The first known use of the term "econometrics" (in cognate form) was by Paweł Ciompa in Ragnar Frisch is credited with coining the term in the sense that it is used today.
Econometrics is the unification of economics, mathematics, and statistics. This unification produces more than the sum of its parts. Econometrics add empirical content to economic theory allowing theories to be tested and used for forecasting and policy evaluation. The basic tool for econometrics is the linear regression model. In modern econometrics, other statistical tools are frequently used, but linear regression is still the most frequently used starting point for an analysis. Estimating a linear regression on two variables can be visualized as fitting a line through data points representing paired values of the independent and dependent variables.