High Quality Content by WIKIPEDIA articles! In regression analysis and related fields such as econometrics, specification is the process of converting a theory into a regression model. This process consists of selecting an appropriate functional form for the model and choosing which variables to include. Model specification is one of the first steps in regression analysis. If an estimated model is misspecified, it will be biased and inconsistent. Specification error occurs when an independent variable is correlated with the error term. There are several different causes of specification error.