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:
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview. Sign up
to
access the rest of the document.
 Spring '08
 Staff
 Econometrics, Panel data, NLSY

Click to edit the document details