Econometrics is a branch of economics that uses statistical methods to analyze economic data. It helps researchers and policymakers understand relationships between different economic variables, such as income, employment, and inflation. By applying mathematical models, econometrics can test theories and forecast future trends. The field combines economic theory with data analysis, allowing for more informed decision-making. Econometricians often use tools like regression analysis to estimate the impact of one variable on another. This approach is essential for evaluating the effectiveness of policies and understanding complex economic phenomena.