Basic steps of the analysis
- Model specification (econometric model should be correctly specified according to economic theory)
- Data collection and preparation (generate new variables or transform existing ones)
- Descriptive statistics of the sample data and examination of their properties
- Parameters estimation according to the chosen estimator, e.g. OLS
- Significance testing of estimated parameters
- Diagnostic checking if all assumptions are met and how well model fits the data
- Interpretation and forecasting (to explain and predict changes of actual economic phenomena)