ECON 330 ECONOMETRICS
Professor Lemke
Department of Economics, Business, and Finance
Lake Forest College
Fall 2016

CONTACT INFORMATION

Office: 418 Young Hall
Phone: 847-735-5143
E-mail: lemke@lakeforest.edu
Class Webpage: http://campus.lakeforest.edu/lemke/econ330/index.html

COLLEGE CATALOG DESCRIPTION

ECON 330: Econometrics Use of statistical methods, especially multiple regression, to test hypotheses based on economic theory. Some use of computer programs. Prerequisite: ECON 130, MATH 110, and ECON 210 or ECON 220.

GOALS AND LEARNING OBJECTIVES

As a student in this class, you should become a better economist, researcher, and statistician. You should gain a solid understanding of what good research questions are, what valid answers look like, and how data can and cannot be used to answer questions. You will also be required to expand your knowledge of Stata - one of the most common statistical software programs. Statistical analysis in the workplace relies exclusively on software, or, more specifically, on workers who can use and understand statistical software. After completing this course, you will be able to include on your resume that you have a working knowledge of Stata. This will be very appealing to potential employers and graduate programs.

In terms of your being evaluated in this class, there are four learning objectives:

1. Econometric Theory: You will learn the ideas, techniques, and shortcomings of classical regression. You will be able to demonstrate the mathematical properties of ordinary least squares estimation, and you will learn several advanced estimation procedures.
2. Stata: You will develop a working knowledge of Stata.
3. Understanding Journal Articles: You will develop a broad enough understanding of econometrics so you can understand empirical journal articles.
4. Reseach Project: You will conduct an original research project that will culminate in an empirical research paper. You will also give three short presentations to the class.
   
   

CLASS LECTURES AND OFFICE HOURS

Class meets 1:00 - 2:20 on Mondays and Wednesdays in Young Hall 313. We will also meet occasionally in room 237 of the Library to work with Stata. Office hours are from 11:00am - 12:00pm M, 11:00am - 1:00pm WF, and by appointment. Outside of stopping by my office, the best way to contact me is by e-mail at lemke@lakeforest.edu. You can also call my office (x5143) or my cell (847-224-8928).

TEXTBOOK

Rather than having a formal textbook, you must purchase your own copy of the lecture notes for $35. You can pay in the business office (North Hall) from 8:30 - 3:30 or you can pay online with a credit card at http://secure.acceptiva.com/?cst=041a02 . When you pay, you will be given or emailed a receipt. Take the receipt to Harriet Doud (121 Young Hall) who will then give you a copy of the notes.

The textbook that the notes follow most closely is Using Econometrics: A Practical Guide 6th Edition, A. H. Studenmund, Pearson Addison Wesley, 2011. ISBN: 978-0-13-136773-9. It is a very good book. Unfortunately, it is also a very expensive textbook ($250 new), as all econometrics textbooks are. You do not need to purchase an econometrics textbook, but if you would like to be able to read a textbook from time to time, I would suggest buying a used copy of Studenmund, but really any econometrics textbook published in the last 10 years is probably worthwhile. The website for the Studenmund textbook is found here.

PROBLEM SETS (15%)

Problem sets will be assigned regularly. Work in groups of 3 to 6 students. Include everyone's name and turn in a single copy of your neatly written or typed answers. Performance on problem sets will determine 15 percent of your grade.

ECONOMETRIC THEORY (25%)

Your knowledge of econometric theory will be assessed with two open-book exams, on Wed. Oct. 12 and on Mon. Nov. 21. Your performance on the exams will determine 25 percent of your grade.

STATA EXAM (15%)

Your knowledge of Stata will be assessed by your performance on an open-note Stata exam on Wednesday, December 7. Your performance on the Stata exam will determine 15 percent of your grade. To learn Stata, we will spend several days in the computer lab (room 237 of the library). Specifically, we will be in the computer lab on

Monday, September 12
Wednesday, September 14
Monday, September 26
Wednesday, October 5
Wednesday, October 19
Wednesday, November 16
Monday, December 5
Wednesday, December 7

EMPIRICAL RESEARCH PROJECT (45%)

Your research paper is due at 3:00pm on Thursday, December 8. You must email me (lemke@lakeforest.edu) an electronic copy as well as turn in a hard copy. Your performance on your empirical research paper is worth 33% of your final grade.

In addition to writing an empirical research paper, you will present three times to the class (12% of your final grade).

• On Monday, October 26 or Wednesday, October 28, you will use Power Point to present for eight minutes: five minutes to give a "Supporting Presentation" on the journal article of your choosing that is on the same topic as your empirical research paper, and three minutes to explain to the class your specific research question, data source, and summary statistics of your primary dependent and independent variables. Your performance during this presentation will determine 4% of your final grade.

• During the class's final exam slot (1:00-6:00pm, Thursday, Dec. 15), you will give a five minute Supporting Presentation on a randomly chosen classmate's empirical research paper. Your performance during this presentation will determine 4% of your final grade and 2% of your classmate's final grade.

• During the class's final exam slot, you will give a three minute Project Critique of a randomly chosen classmate's empirical research project. Your performance on this Paper Critique will determine 2% of your final grade.

Supporting Presentation
When giving a five minute supporting presentation (of the journal article of your choosing or of a classmate's research project), you are tasked with explaining four things to the class:

1. What is the specific empirical question(s) asked in the paper?
2. What is the data source used to answer the question?
3. What are the summary statistics, including units of measurement, of the dependent variable(s) and primary independent variable(s) used to answer the question?
4. What are the empirical results from the primary regression for each dependent variable?

Paper Critique
When giving a three minute critique of one of your classmate's empirical research projects, you are tasked with explaining three things to the class:

1. Review the primary empirical claim made in the paper.
2. State whether you believe in whole, in part, or not at all the empirical claim made in the paper.
3. List three things you would change to improve the analysis/final paper in future research.

Empirical Research Project Paper (33%)
For the empirical research paper that is due by 3pm on Thursday, December 8, economic content, econometric techniques, grammar, and presentation style all matter. A brilliantly executed econometric project that is poorly written will receive a score of 60 out of 100, while a beautifully written paper that has no econometric content will receive a score of 20 out of 100. Failure to submit a paper that uses Stata to execute econometric analysis of a reseach project will result in failure of the class. Below is a list of expectations regarding your paper.

You need to find a dataset and a question early in the semester. You may work with me to hone your question and to make sure you are pursuing a good data source. In general the paper must include the following sections and components:

• Introduction (2 to 3 paragraphs): The introduction must state your reseach topic and explain why it is important, and clearly state your research question. Your reserach question can be somewhat specific, such as "What factors explain life expectancy in developing countries?" or "What demographic factors explain whether someone plays the lottery?"; or your reserach question can be very specific, such as "What role does access to running water and sanitary services play in explaining life expectancy in developing countries?" or "How does playing the lottery vary by sex and by race?".

• Data Description: The data section must clearly state your data source(s) and all variables used in your analysis, including summary statistics and units of measurements. Summary statistics will be listed in Table 1 and directly discussed in the paper.

• Econometric Model: Include a table or a figure that generally shows the reader the general behavior your question is interested in. (We will call this "optical econometrics" in class. Then provide your econometric model(s). Place emphasis on your most important coefficients (the betas), how they will be interpretted, and why they identify the effect needed to answer your question.

• Results: Provide a table (or tables) of regression results. Discuss your primary results (across multiple dependent varaibles if appropriate). Frame your results in the context of the literature by citing other articles as appropriate. Limit your discussion of secondary results (i.e., secondary independent variables) with statistical significance to at most one or two paragraphs.

• Conclusion (1 to 2 paragraphs): Restate your general question and your most important finding(s)/answer(s).

• Lastly, in order, list your references (at least five), your tables and figures, and provide your entire Stata program (not log file) in an appendix.

If you want me to read a rough draft, give it to me in class on Monday, November 28. I will return comments to you no later than Friday, Dedember 2.

The specifications for writing your paper are as follows:

• The style and format of the paper should be similar to the journal articles we read throughout the semester.

• Grammar and presentation style matter, a lot!

• Papers should be however long as necessary to address the required topics listed above. Most papers will be between six and eight pages of writing, but what is most important is that all topics are addressed in a serious manner.

• The paper must include at least five print references. Do not use web references for published works. Do not cite the lecture notes.

• Technical specifications: The text must be double spaced with 1 inch margins, 12 point Times Roman font, 10 point font page numbers centered on the bottom of each page except the first, and single-spaced footnotes in 10 point Times Roman font.

• Include well-formatted and clear tables of the summary statistics and regression results. Summary statistics include the mean, standard deviation, maximum value, and minimum value. Tables of regression results must include standard errors along with a footnote that mentions this, a method that indicates statistical significance, number of observations for each regression, and an R-squared for each regression. All tables must include a number (e.g., Table 1), a title, clear notes if required, and the number of observations being considered. Include all tables at the end of the paper, with each table on its own page. Tables can be in any appropriate font, but they cannot be presented as Stata output.

• Papers must have a title page with an abstract, three or four keywords, three or four Journal of Economic Literature classification codes, and contact information for the author. Do not list Prof. Lemke or the class in any way.

For many students, the first struggle encountered with the research project is finding data for an idea. There are two wonderful sources of data that you have access to: ICPSR and the DataFerrett.

• The Inter-university Consortium for Political and Social Research (ICPSR) is found online at https://www.icpsr.umich.edu/icpsrweb/landing.jsp. You can search on an idea, and ICPSR will give you a list of papers and datasets on the topic. Some datasets are harder than others to use, but in general this greatly expediates the search for data. You will have to create an account to use ICPSR if you want to download their data, but your Lake Forest College email will work as the College is a paying member to ICPSR.

• The DataFerrett is hosted by the U.S. Census Bureau, and is found online at http://dataferrett.census.gov/. You can follow its online instructions (I have also placed step-by-step instructions in Stata Lab #1). Once you access the portal, you can download all of the Census datasets, of which there are many. Be sure to select your variables wisely and create a codebook for future reference.

College Policies

Non-Discriminiation Policies

This class will be conducted in an atmosphere of mutual respect. I encourage your active participation and welcome both respectful discourse and reasoned debate. However, if your language or conduct at any time demonstrates a lack of respect for anyone’s race, gender, sexuality, culture, beliefs, or abilities, you will not be permitted to participate further.

Statement about Sexual Misconduct

Lake Forest College is committed to providing students with a safe learning environment. College policy prohibits sexual misconduct, including sexual harassment, discrimination, non-consensual sexual intercourse and contact, domestic and dating violence and stalking. More information regarding the College’s Policy can be found at www.lakeforest.edu/about.administration/sexualmisconduct/.

As a responsible faculty member and as required by College policy and federal law, I will report incidents of sexual misconduct of which I am informed to the Title IX Coordinator, Julie Yura at yura@lakeforest.edu or 847-735-6009.

Statement about Disability Services

If you are a student who needs an accommodation because of a disability or medical or psychological condition that limits your ability to fully participate in this course, please contact Teryn Robinson, Assistant Dean of Faculty for Learning Support, to document your disability with the College and with me for this course. Academic accommodations should be reasonable and not alter the fundamental nature of this course. As it can take a week or more to arrange requested accommodations, you are encouraged to establish your semester accommodations as early in the semester as possible.

Assistant Dean Robinson’s contact information is robinson@lakeforest.edu or 847-735-5167. For more information about services for students with disabilities at Lake Forest College, please see www.lakeforest.edu/academics/resources/disability/.