General methodology of modern economic research Step 1:Data collections and summary of empirical stylized facts Step 1:Data collections and summary of empirical stylized facts The so-called stylized facts are often summarized from observed economic data. Example 1:Engel curve in microeconomics The share of a consumer's expenditure on a commodity out of her or his total income will vary as his/her income changes; Engel Curves Income (per month) 30 Inferior Engel curves slope 20 backward bending for inferior goods. Normal 10 Food(units 8 12 16 per month) Probability and Statistics for Economists Introduction to Statistics and Econometrics May13,2019 4Probability and Statistics for Economists Introduction to Statistics and Econometrics May 13, 2019 4 Step 1: Data collections and summary of empirical stylized facts The so-called stylized facts are often summarized from observed economic data. General methodology of modern economic research Step 1: Data collections and summary of empirical stylized facts Example 1：Engel curve in microeconomics The share of a consumer’s expenditure on a commodity out of her or his total income will vary as his/her income changes;