Econometric & Statistical Analysis & Modeling

ECONorthwest can construct or deconstruct any econometric and statistical model or analysis.

An econometric model is usually the most appropriate way to predict the effect of a change in external conditions on a complex system. By relying on data about how a system has responded to previous changes in external conditions, an econometric model can estimate how the system will rearrange itself to accommodate future changes.

ECONorthwest has a wealth of experience developing regional and statewide econometric forecasting models. We have incorporated econometric models into larger integrated models with land use and transportation components. We have refined methods for producing the best possible forecasts given limited data, including the use of Bayesian vector autoregression for time-series models and the use of a neural network for selecting the best combination of variables for individual equations.

We also have expertise in applying econometric modeling techniques to markets for particular goods and services and analyzing "big data" (i.e., large datasets that require specialized data management tools) to identify trends in consumer and market behavior.

Forecasting Models

ECONorthwest has experience building customized macroeconomic forecasting models, revenue forecasting models, and product demand forecasting models. We use advanced neural network tools to identify the combinations of variables that provide best predictive power, and use appropriate statistical methods to estimate the models, taking into account situations in which:

• The future level of an economic variable depends on its current and prior levels.
• The variability in a dependent variable depends on its size.
• The variables are correlated with each other.
• The available data are not ideal measures of the variables of interest.

Pricing Models

ECONorthwest creates models that determine optimal pricing strategies and price levels for a wide range of markets. Examples include pricing for medical services, highway tolls, and water and electricity. Our clients rely on our toll optimization model to forecast revenues from road pricing projects. This model remains the most sophisticated and reliable tool available for that purpose.

Simulation Models

ECONorthwest helps organizations make smarter decisions by developing computer-based models that simulate a variety of complex systems. Examples include a model of Oregon's unique public employee retirement system, and a minute-by-minute implementation model of value pricing on a high-occupancy toll (HOT) lane.

Many of these models use repeated simulations, each drawing from distributions of input variables, so the model reports not only the expected outcome, but also the distribution of possible outcomes and the likelihood that conditions will be better or worse than user-defined thresholds.

Interested in learning more about how ECONorthwest can help you with your next project? Our toolbox is full and our staff enjoy meeting new challenges.