<p>I would like to find the relationship between two variables (spending and earning) in time-series data and I am wondering if VAR would be a good way to approach this? If not, which approach(es) would work better?</p>
<p>Let me know what I can add to this post to make more useful.</p>

CC BY-SA 4.0
2024-02-26T18:33:41.653Z
If you want a data-driven approach, VAR sounds fine to me. An alternative could be a theory-driven approach where the statistical model would be (partly) implied by the theory.
Richard Hardy
CC BY-SA 4.0
2024-02-26T18:37:37.520Z
@RichardHardy Thanks. Can you let me know where I can learn more about theory-driven approaches (in general).
twisted_SOLDIER
CC BY-SA 4.0
2024-02-26T20:01:31.113Z
You could look for models in microeconomic (or perhaps even macroeconomic?) theory that postulate something about the relationship between spending and earning and then look for statistical models that contain such relationships. It might even end up being a VAR but with particular restrictions.
Richard Hardy
<econometrics><time-series>
How to Find the Relationship Between Variables in Time-Series Data?
twisted_SOLDIER
# How to Find the Relationship Between Variables in Time-Series Data?

(Asked by: username_0 on 2024-02-26)

I would like to find the relationship between two variables (spending and earning) in time-series data and I am wondering if VAR would be a good way to approach this? If not, which approach(es) would work better?

Let me know what I can add to this post to make more useful.

**Tags:** econometrics, time-series

> **Comments:**
> **username_1**: If you want a data-driven approach, VAR sounds fine to me. An alternative could be a theory-driven approach where the statistical model would be (partly) implied by the theory.  
> **username_0**: @RichardHardy Thanks. Can you let me know where I can learn more about theory-driven approaches (in general).  
> **username_1**: You could look for models in microeconomic (or perhaps even macroeconomic?) theory that postulate something about the relationship between spending and earning and then look for statistical models that contain such relationships. It might even end up being a VAR but with particular restrictions.  

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