Amsterdam, Netherlands

Econometrics and Operations Research: Operations Research Theory

Master's
Language: EnglishStudies in English
Subject area: economy and administration
Time study: 1 year
University website: vu.nl/en
Econometrics
Econometrics is the application of statistical methods to economic data and is described as the branch of economics that aims to give empirical content to economic relations. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships". The first known use of the term "econometrics" (in cognate form) was by Polish economist Paweł Ciompa in 1910. Jan Tinbergen is considered by many to be one of the founding fathers of econometrics. Ragnar Frisch is credited with coining the term in the sense in which it is used today.
Operations Research
Operations research, or operational research in British usage, is a discipline that deals with the application of advanced analytical methods to help make better decisions. Further, the term 'operational analysis' is used in the British (and some British Commonwealth) military as an intrinsic part of capability development, management and assurance. In particular, operational analysis forms part of the Combined Operational Effectiveness and Investment Appraisals (COEIA), which support British defense capability acquisition decision-making.
Research
Research comprises "creative and systematic work undertaken to increase the stock of knowledge, including knowledge of humans, culture and society, and the use of this stock of knowledge to devise new applications." It is used to establish or confirm facts, reaffirm the results of previous work, solve new or existing problems, support theorems, or develop new theories. A research project may also be an expansion on past work in the field. Research projects can be used to develop further knowledge on a topic, or in the example of a school research project, they can be used to further a student's research prowess to prepare them for future jobs or reports. To test the validity of instruments, procedures, or experiments, research may replicate elements of prior projects or the project as a whole. The primary purposes of basic research (as opposed to applied research) are documentation, discovery, interpretation, or the research and development (R&D) of methods and systems for the advancement of human knowledge. Approaches to research depend on epistemologies, which vary considerably both within and between humanities and sciences. There are several forms of research: scientific, humanities, artistic, economic, social, business, marketing, practitioner research, life, technological, etc.
Theory
A theory is a contemplative and rational type of abstract or generalizing thinking, or the results of such thinking. Depending on the context, the results might, for example, include generalized explanations of how nature works. The word has its roots in ancient Greek, but in modern use it has taken on several related meanings.
Theory
All competent thinkers agree with Bacon that there can be no real knowledge except that which rests upon observed facts. This fundamental maxim is evidently indisputable if it is applied, as it ought to be, to the mature state of our intelligence. But, if we consider the origin of our knowledge, it is no less certain that the primitive human mind could not, and indeed ought not to, have thought in that way. For if, on the one hand, every Positive theory must necessarily be founded upon observations, it is, on the other hand, no less true that, in order to observe, our mind has need of some theory or other. If in contemplating phenomena we did not immediately connect them with principles, not only would it be impossible for us to combine these isolated observations, and therefore to derive profit from them, but we should even be entirely incapable of remembering facts, which would for the most remain unnoted by us.
Thus there were two difficulties be overcome: the human mind had to observe in order to form real theories, and yet had to form theories of some sort before it could apply itself to a connected series of observations. The primitive human mind, therefore, found itself involved in a vicious circle, from which it would never have had any means of escaping, if a natural way of the difficulty had not fortunately found by the spontaneous development of Theological conceptions. ...chimerical hopes ..exaggerated ideas of man's importance in the universe to which the Theological Philosophy ...at the commencement, ...afforded an indispensable stimulus without the aid which we cannot, indeed, conceive how the primitive human mind would have been induced to undertake any arduous labours.
Auguste Comte, Cours de Philosophie Positive (1830-1842); The Positive Philosophy of Auguste Comte (1853) Tr. Harriet Martineau; The Fundamental Principles of the Positive Philosophy: Being the First Two Chapters of the Cours de Philosophie Positive of Auguste Comte (1905) pp. 23-25.
Operations Research
It may be said that systems engineering is directed at the design and operating problems of production processes and units, while operations research is applied to problems in other areas of management such as sales, marketing, and external finance.
Tappi (1959) Vol. 42. p. 573.
Research
Attempt the end and never stand to doubt;
Nothing's so hard but search will find it out.
Robert Herrick, Hesperides (1648), Seeke and Finde.
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