Machine Learning For Economics Research: When, What And How

Researchers have successfully used Machine Learning (ML) alongside traditional econometric tools to advance understanding of economic systems. By combining the strengths of both fields, researchers can improve the accuracy and reliability of economic analyses to better inform policy decisions. ML models can add value to economic research and analysis by helping with variable selections, capturing more flexible relationships between data than nonlinear models, and processing non-traditional data such as images, text, audio and video. Additionally, researchers should clearly articulate their goals and explain whether certain properties of ML algorithms are important.