Empirical project

Description

Econometrics is a very applied discipline by nature. As such, studying the theory is not the best way to learn it. It is important to practice Econometrics in order to be able to grasp what we can learn from it, what we must pay attention to, and what the potential challenges that may arise in practice are. With this in mind, a big part of your grade for this class will be based on a term project.

You must form teams of 4-5 members and complete an empirical project. Each team must select a data set from the list below and identify a related Economic question. Then you must try to provide an answer to the initial question, based on the empirical findings resulting from the statistical analysis of the data. For this purpose you must read and follow the guidelines from Chapter 11 in the textbook. The analysis must involve at least one multiple regression and at least one hypothesis test. The selection of the model(s) and hypotheses must be well justified by a theoretical analysis (it is not required to use a mathematical model, but some Economic intuition must be provided). The project will be graded based on three outputs described ahead: a group report, a group presentation, and an individual executive summary.

The companion website to Stock and Watson (2011) provides a collection of datasets corresponding to different research papers. If you have problems coming up with research ideas, you may read the corresponding papers, or the empirical exercises in Stock and Watson (2011). However / strongly encourage you to try to come up with a research question and methodology on your own. The datasets and the reference to the corresponding papers are available online at wps.aw.com/aw_stock_ie_3/178/45691/11696965.cw/index.html. You must choose one of the following datasets:

- College distance - Cross-sectional dataset containing information on years of education, proximity to universities and cost of tuition, as well as a number of demographic characteristics. The data is taken from a survey of high school students.

- Current population survey - A large random cross-sectional sample containing data on the characteristics of the national labor force in 1992 and$2008.

- Teacher ratings - Course evaluations and instructor characteristics (including a rating of physical appearance) for a number of courses from the University of Texas at Austin.

- Growth - Average growth rates from 1960 to 1995 , and macroeconomic characteristics for a sample of 65 countries.

- Guns - Crime incidence, demographic characteristics and gun regulations by state from 1977 to $1999 .$

- Fertility - Demographic characteristics, family characteristics and number and gender of kids for a large sample of women in fertile ages.

- Names - Call backs to job applications by fake candidates with randomly selected names typically associated with different racial groups.

In order to analyze the data you will have to use a computer package capable of performing regression analysis. There is a great variety of software available.

- You may be able to do the project using MS Excel. However, the analysis may be easier if you use more specialized software.

- Two popular packages for statistical analysis in Economics are Stata and Eviews. Learning how to use them might be useful for more advanced courses. I will cover some basic Stata commands in class. You may find the following tutorials by Stock and Watson useful tiny.cC/STATA, tiny.CC/EVIEWS.

- Other good programs for statistical analysis are R (open source), SPSS (graphical interface build upon R) and Minitab (developed by Pen State grad students). If you are familiar with Matlab, you can use the statistical toolbox. Finally, a new popular alternative is Python (open source). Python is not specialized for statistical analysis, but it is quite powerful, versatile, and easy to learn. It is one of the most popular alternatives for scraping data off the web.

The only package I will discuss in class is Stata, and the only other package I'm proficient with is Matlab (if you choose to use a different package my ability to assist you will be limited). But you can choose to use whichever software you prefer. All of these packages are available in the computer labs. The datasets are available both in stata and excel formats, and all packages can import these formats.

Price: $25.49

Solution: The downloadable solution consists of 14 pages, 1149 words and 8 charts.
Deliverable: Word Document