This chapter describes the application of regression and correlation to economic research. Scientific forecasting is impossible without comparing different quantities, without measuring, and without using numbers. The knowledge of causal relations, existing between a given phenomenon and other phenomena, is indispensable for scientific forecasting. If the relation between them is very strong, it
... [Show full abstract] can be presented as a mathematical function. The chapter discusses the most important curves belonging to the first group: (1) want curves, (2) personal income distribution curves, (3) demand curves, and (4) cost curves. Engel curves are a special case of want satisfaction curves. A smoothed out curve of cumulative frequency enables to guess the shape of the frequency distribution curve. In practice, the regression line, describing the relationship between cost and production, is a straight line. The determination of regression line parameters is the task of statistics. The percentage share of maintenance expenditures decreases with an increase in income. Functions used in mathematical economics are a tool of learning only when they can be statistically verified.