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lecture1 - ECON 103 Lecture 1 Introduction Maria Casanova...

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ECON 103, Lecture 1: Introduction Maria Casanova [email protected] Office: 8385 Bunche Hall Office hours: Fridays 2:30 to 4:00pm Maria Casanova Lecture 1
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1. What is Econometrics? What is ECONOMETRICS? Application of statistical methods for analyzing and predicting economic phenomena: TESTING economic theories QUANTIFYING relationships among economic variables EVALUATING government and business economic policies FORECASTING micro (and macro) economic variables Maria Casanova Lecture 1
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1. What is Econometrics? EXAMPLES: What is the quantitative effect of reducing class size on student achievement? How does another year of education change earnings? What is the price elasticity of cigarettes? What is the effect on output growth of a 1% decrease in interest rate by the Fed? What is the effect on housing prices of environmental improvements? Maria Casanova Lecture 1
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1. What is Econometrics? We use Econometrics for empirical analysis in every branch of applied economics: labor economics industrial economics macroeconomics marketing economic development financial economics Maria Casanova Lecture 1
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2. Measuring Causal Effects Many econometric questions involve causal relationships among variables. Ideal way to measure causal effect is in a randomized controlled experiment: A control group receives no treatment. A treatment group receives the treatment. Treatment is assigned randomly. Most of the course deals with difficulties in estimating causal effects from observational data.
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