We often think of economics in terms of numbers, like interest rates or gross domestic product. But there are a variety of non-measurable concepts that often play an important role in economic decisions. These include variables that we can’t observe, like ability, beliefs, expectations and level of risk aversion.
Dr. Irene Botosaru, Canada Research Chair in Applied Econometrics, is developing new models and approaches to longitudinal data that can accommodate flexible patterns for how these unobservable factors may vary among individuals and across time. Ultimately, she and her research team hope their work will lead to a better understanding of how non-measurable concepts affect economic decisions and forecasting.