metricsguidelines

metricsguidelines - Applied Econometrics Fall 2008...

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Applied Econometrics Fall 2008 Guidelines for the Empirical Project The goal of this class is to train you to answer economic questions using data, so 30 % of your grade comes from this empirical project. Here is my suggestion for how to do the project: 1. Familiarize yourself with a dataset, like CPS, PSID, or NLSY. Alternatively, you may look at the data from Jeff Wooldridge’s webpage ( http://wooldridge.swcollege.com ) for inspiration, but I don’t want you to use the pre - prepared data as it is. Macro data can be found at the Penn World Tables ( http://pwt.econ.upenn.edu ) . 2. Design some research question that could be answered using this data. ( “Did the effects of education on earnings change after 1997?” ) Discuss your question with me. Your question should imply some testable hypothesis. ( In this case, an appropriate hypothesis is “the estimated returns to education are the same prior to 1997 as after 1997.” ) 3. Answer the question using econometric analysis. Your technique should involve some sophistication ( some technique from this class, for example: instrumental variables, fixed effects or random effects, adjusting for selection or censoring ) . 4. Summarize your results in a paper. Describe: your question, your data ( the specific variables that you use, and the sample that you use ) , your estimation technique, your estimates, and the answer to your question. The paper will probably be 7 - 10 pages long. ( However, I grade on completeness, not length. ) In addition, you should submit your estimation program and the log file as an appendix to the paper. The most important thing is to demonstrate that you know what econometric techniques to use, and when to use them. Let me suggest the following timeline for your research project: Oct. 27: Obtain the data for your project. Nov. 10: Complete descriptive statistics for the variables of interest. Nov. 24: Complete your analysis of the data. Dec. 3:
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metricsguidelines - Applied Econometrics Fall 2008...

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