321_09_slides1 - Introduction Econ 321 Introduction to...

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Introduction Econ 321 Introduction to Econometrics Fall 2009 Econ 321 - Stéphanie Lluis 1 Prof. Stéphanie Lluis Office: HH 239 Office hours: M-W 10am-11:30am
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Why Econometrics? He uses statistics as a drunken man uses lampposts - for support rather than for illumination. ~Andrew Lang A knowledge of statistics is like a knowledge of foreign languages; it may prove of use at any time under any circumstances. - A.L.Bowley Econ 321 - Stéphanie Lluis 2
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Why Econometrics? Summarize large amounts of data in a compact fashion Labor Force Survey (LFS) file with 150,000 observations on earners Compustat file with annual data on 1,000s of firms Econ 321 - Stéphanie Lluis 3
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Why Econometrics? Provides a method of examining facts (data) generated from a large number of cases to determine if they are consistent with theories Econ 321 - Stéphanie Lluis 4
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Why Econometrics? Example of issues Does an attendance award program reduce absenteeism Increases in the minimum wage reduce employment Training programs improve performance Econ 321 - Stéphanie Lluis 5
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Why Econometrics? Determine the magnitude of the relationship (important for policy decisions) An A% increase in the minimum wage is associated with a B% decline in teenage employment Piece rate workers produce H% more output than hourly workers Following training program X, productivity rose by Y% If a firm is going to invest in a program, it needs to know the rate of return, determined by the improvement in productivity Econ 321 - Stéphanie Lluis 6
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Why Econometrics?
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