Economics 312: Theory and Practice of Econometrics
Spring 2007
Final Project Guidelines and Topics

For the final project, you will work in groups of five students on four topics. I will provide a basic data set in somewhat rough form. You are to spend the last month of the semester cleaning up and adding to the data set as necessary, then formulating and estimating an econometric model to perform the appropriate tests. Results will be summarized in a report and presentation during finals week.

You may self-select into groups either based on preferences for topics or for working partners. Email me with your prioritized preferences for projects. I will accept joint requests from groups of students who want to be assigned together if all members of the group agree.

I expect to have data sets for you to start working on after spring break for the four topics below. All of these projects are related to liberal-arts college; these are the data with which I've been working most intensely in recent years. If a group of students has an idea for an alternative project of comparable scope with easily available data, I'd be happy to entertain your proposals. There are many data sets that you might explore. A good place to start would be at the National Bureau of Economic Research data site.

Topics:

1. What will Reed have to pay for its faculty in 2012 in order to be at the median of its reference group of colleges? Construct a model of faculty-salary determination at liberal-arts colleges and use it to forecast salaries at Reed and peer institutions.

2. How elastic is the demand for Reed? What effects would an increase in tuition, matched or not matched by increases in financial aid, have on decisions of admitted applicants? You would update and add to the Buss, Parker, and Rivenburg Economics of Education Review paper.

3. How much will other liberal-arts colleges raise tuition next year? Every year Reed must decide how much to raise tuition and other charges. The biggest variable that affects this decision is how much our peers are raising theirs, but since we have limited communication with them (for legal reasons), we must try to estimate their tuition increases. You would build a model of tuition determination at liberal-arts colleges and use it to predict next year's tuition levels.

4. How much would it cost to hire a new president or dean? You would construct a model to estimate what factors determine the salaries of presidents and chief academic officers at liberal-arts colleges.