Empirical_economics - Empirical Knowledge of Cause and...

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Empirical Knowledge of Cause and Effect Does study time affect grades Human capital theory Study time is an investment Increasing the stock of human capital Grades test for the size of the stock Professors tell students to study Professors try to test learning of material
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Empirical Analysis Measure the variables Independent and dependent variables Plot the regression line Slope is the magnitude of the effect How much will grade point average increase if study time increases by one hour per day Study time causes g.p.a.
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studying and grades 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 0 5 10 15 20 25 30 35 hours studied grade point average Series1
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studying and grades 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 0 5 10 15 20 25 30 35 hours studied grade point average Series1 slope = .01
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Study time is not the only variable that causes g.p.a. ACT scores, family income, mother’s educational attainment, etc. Omitted variable bias: omitted variable
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This note was uploaded on 10/17/2011 for the course ECON 101 taught by Professor Thompson during the Spring '11 term at Michigan State University.

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Empirical_economics - Empirical Knowledge of Cause and...

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