"The picture-examining eye is the best finder we have of the wholly unanticipated"
(John Tukey, 1915 - 2000)
Back in 1992 I participated in a panel discussion at the Australasian Meetings of the Econometric Society, in Melbourne. I don't recall what the topic was for the panel discussion, but I do recall that my brief was to talk about some aspects of "best practice" in teaching econometrics. In case you weren't there, if you slept through my talk, or if you simply hadn't yet learned how to spell "econometrics" back in 1992, I thought I'd share some related pearls of wisdom with you.
One of the main points that I made in that panel discussion could be summarized as: "Plot it or Perish". In other words, if you don't graph your data before undertaking any econometric analysis, then you're running the risk of a major catastrophe. There's nothing new in this message, of course - it's been trumpeted by many eminent statisticians in the past. However, I went further and made a scandalous (but serious) suggestion.
My proposal was that no econometrics computer package should allow you to see any regression results until you'd viewed some suitable data-plots. So, if you were using your favourite package, and issued a generic command along the lines: OLS Y C X, then a scatter-plot of Y against X would appear on your computer screen. You'd be given an option to see other plots (such as log(Y) against log(X), and so on). In the case of a multiple regression model, a command of the form: OLS Y C X1 X2 X3, would result in several partial plots of Y against each of the regressors, etc.. Then, after a prescribed time delay you would eventually see the message:
"Are you abolutely sure that you want to fit this regression model?"
