Representation in Econometrics: A Historical Perspective

Measurement forms the substance of econometrics. This chapter outlines the history of econometrics from a measurement perspective - how have measurement errors been dealt with and how, from a methodological standpoint, did econometrics evolve so as to represent theory more adequately in relation to data? The evolution is organized in terms of four phases: 'theory and measurement', 'measurement and theory', 'measurement with theory' and 'measurement without theory'. The question of how measurement research has helped in the advancement of knowledge advance is discussed in the light of this history.