Econometrics (aka stats for economists) is how we test models on real data. It seems to often be confused with the idea of using math in econ however ("reducing

Econometrics (aka stats for economists) is how we test models on real data. It seems to often be confused with the idea of using math in econ however ("reducing irrational economic actors into mere equations" seems to me to be economic theory, not something specific about econometrics). This has two purposes: - we would like to know which of our models are true, or at least good enough, and which ones are not. - we would like to know the actual magnitude of things. For instance, if we increase tax rate by 1%, how large will the taxable income reaction be? Decrease by 0%? .25%? 1%? 10%? That's useful information for policy making.