Yes, Folks, You Too Can Do This At Home!

I’ve had a couple of questions about what software I’ve used in the analyses in this blog. I’m a big fan of EViews, so much so I actually bought a license for it – it’s been around a long time, is comparatively user-friendly, and has 99% of the functions most econometricians need.

Unfortunately it’s also priced to kill. Luckily I was still doing my Masters at the time so I qualified for a student discount, which takes 60% off the retail price. If anybody’s interested in a copy, you can contact Statworks in PJ – they’re the local distributors.

So what happens if you need to do some forecasting or econometric work, and don’t want to lose an arm and a leg? Excel just doesn’t cut it, even with some of the advanced plug-ins available – you might be able to do multivariate regressions, but diagnostics will get you stuck. And forget about more advanced estimation techniques such as VAR or ARCH.

The best alternative I’ve found, if you don’t want to deal with scripting or programming, is Gretl. Gretl is open-source, supports lots of platforms, and is fairly feature complete – in some ways it’s more powerful than EViews. It’s definitely not as user friendly (you can’t for instance just paste in a series from an external source), and graphs are very basic, but all the important bits are there and then some. The Windows version is available here.

But how do you use this thing? I’ll cover some of the basics in a series of posts, using real Malaysian data to illustrate. Stay tuned.