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321_F11_slides1 - Introduction Econ 321 Introduction to...

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Click to edit Master subtitle style Econ 321 - Stéphanie Lluis Introduction Econ 321 Introduction to Econometrics Fall 2011 11 Prof. Stéphanie Lluis Office: HH 239 Office hours: M-W: 10-11:30am
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Econ 321 - Stéphanie Lluis Why Econometrics? The most important questions of life are, for the most part, really only problems of probability . Pierre Simon, Marquis de Laplace A knowledge of statistics is like a knowledge of foreign languages; it may prove of use at any time under any 22
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Econ 321 - Stéphanie Lluis 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 33
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Econ 321 - Stéphanie Lluis Why Econometrics? Provides a method of examining facts and data generated from a large number of cases to determine if they are consistent with theories 44
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Econ 321 - Stéphanie Lluis Why Econometrics? Example of issues Does an attendance award program reduce absenteeism Increases in the minimum wage reduce employment Training programs improve performance 55
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Econ 321 - Stéphanie Lluis 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 66
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Econ 321 - Stéphanie Lluis Why Econometrics? What is a productivity improvement?
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