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View Full Version : Why don't micro-economists use continuous functions?


Rainer
30th November 2010, 04:34 PM
Hello,

I am trying to understand why economists don't seem to be interested in deriving and manipulating continuous functions from their statistical analyses. I am referring mostly to income distribution curves and engel curves, which some authors have long ago shown to consistently converge to definite functional forms. Why don't economists use these forms?

Yes, of course many of the sampe data points would not lie exactly on such a curve, but as long as they are within the standard error, why not use the functional form? Wouldn't it be much easier to manipulate in modelling?


Thanks

DallasDad
30th November 2010, 04:55 PM
I'm not an economist, but my first blush reaction is that the type of analysis you describe is more descriptive than predictive. The model lets variables be manipulated artificially to see their impacts.