Econometrics is a set of statistical tools that allows economists to test hypotheses using really world data. It It takes economic models, tests them through statistical trials and then compare and contrast the results against real-life examples. Econometrics is “the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference. It uses a fairly straightforward approach to economic analysis. It may use standard statistical models to study economic questions, but most often they are with observational data, rather than in controlled experiments.