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Survey of Econometric Methods

Course Content: This course will focus on the application of empirical methods in economics. During the semester we will study the basic concepts of data collection, data presentation, economic statistics and econometrics. We will also read articles from the economics literature that use econometric techniques. This course is taught with the expectation that students have completed Economics 201.

Office Hours: Office hours will be held in Vollum 227 on Mondays, Wednesdays and Thursdays from 3:30-4:30. Students who are unable to come during these times are encouraged to make an appointment.

Text and Required Reading: The principal textbook for this course is Using Econometrics: A Practical Guide (5th edition) by A. H. Studenmund. In addition to readings in the principal textbook, students are responsible for the required readings listed below. Every student is expected to be prepared to contribute meaningfully to each class session.

Evaluation: Evaluation will be based on two midterm examinations, a final exam, homework assignments, and class participation. A detailed list of assignments and due dates is available on the Assignments Web Page. All assignments are due in class. In fairness to other students, late assignments will be penalized 1/2 grade for each day or partial day past the due date. Assignments handed in more than 5 days after the due date will not be accepted.

Collaboration: All work submitted during this course is expected to reflect the effort of the individual whose name appears on top of the page. You are encouraged to work with friends on assignments and to get feedback from tutors and your instructor. However, when the time comes to write your assignment, it must be your work and should be written in words that reflect your understanding of the problem.

Citations: Citations should be used when appropriate and should conform to the guidelines in the Economic Department Citation Guide. The Economics 311 Research Guide has examples for citing statistics and online sources.

Web Databases: Links to numerous statistical databases are available on the Links Web Page. Students will be required to visit web sites to complete some homework assignments.

Teaching Assistant: Anu Samarajiva will be available on Thursdays from 7-9pm in the Dorothy Johansen house. Tutoring is also available through Reed's Academic Support Services and Reed's Student Services Office - Individual Tutoring.

Public Policy Workshop: The Public Policy Workshop (PPW), located in Eliot 110, has computers with Stata and other statistical programs . Access to the PPW can be obtained by filling out a PPW user agreement (available outside Eliot 110A, right next to the PPW cardswipe door).

Materials on Reserve: The following texts and manuals are on reserve in the Reed Library. Stata manuals are also available in the Public Policy Workshop (Eliot 110).

Studenmund, A.H. 2006. Using Econometrics: A Practical Guide (5th edition) Boston, MA: Pearson Addison Wesley.

Gujarati, Damodar N. 1995. Basic Econometrics (3rd edition) New York: McGraw-Hill

Kennedy, Peter. 1998. A Guide to Econometrics (4th edition) Cambridge, MA: MIT Press. <electronic resource>

Smith, Gary. 1998. Introduction to Statistical Reasoning New York: McGraw-Hill

Tufte, Edward R. 1997. Visual Explanations Cheshire, Conn.: Graphics Press

Tufte, Edward R. 2006. Beautiful Evidence Cheshire, Conn.: Graphics Press

Stata Corporation Stata Reference Manuals and User Guide (Release 10) College Station: Texas: Stata Press

I. Introduction and Overview of Regression Analysis (September 3 and 5)

Studenmund, Chapter 1

Best, Joel. 2001. Telling the Truth about Damned Lies and Statistics The Chronicle of Higher Education (May 4): B7-B9.

II. Ordinary Least Squares (September 8 and 10)

Studenmund, Chapter 2

III. Running Regressions (September 10, 12 and 15)

Stata Corporation Stata Reference Manuals and User Guide (Release 10) College Station: Texas: Stata Press

Studenmund, Chapter 3

IV. Classical Model (September 17 and 19)

Studenmund, Chapter 4

V. Probability and Statistics (September 24, 26 and 29)

Studenmund, Chapter 16

*Smith, Gary. 1998. Introduction to Statistical Reasoning New York: McGraw-Hill

VI. Hypothesis Testing (October 1 and 3)

Studenmund, Chapter 5 & Appendix

Gwartney, James and Charles Haworth. 1974. Employer Costs and Discrimination: The Case of Baseball. Journal of Political Economy (July/August) 82:4 873-882.

VII. Model Specification (October 6, 8, 13, 15 and 17)

Studenmund, Chapter 6 & Appendix and Chapter 7

VIII. Multicollinearity (October 27, 29 and 31)

Studenmund, Chapter 8 & Appendix

Deere, Donald, Kevin M. Murphy and Rinis Welch. 1995. Employment and the 1990-1991 Minimum-Wage Hike The American Economic Review (May) 85:2, 232-237.

IX. Serial Correlation (November 3 and 5)

Studenmund, Chapter 9

X. Heteroskedasticity (November 7 and 10)

Studenmund, Chapter 10

XI. Regression User's Handbook & Presentation of Results (November 12)

Studenmund, Chapter 11

Tufte, Edward. 1997. Visual Explanations Cheshire, Conn.: Graphics Press. Chapter 2.

Tufte, Edward. 2006. Beautiful Evidence Cheshire, Conn: Graphics Press. Page 122-155; see pages 156-185 for a critique of PowerPoint.

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XII. Time Series Models (November 17, 19 and 21)

Studenmund, Chapter 12

Feldstein, Martin. 1996. Social Security and Saving: New Time Series Evidence National Tax Journal (June) 49:2, 151-164.

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XIII. Dummy Dependent Variable Models (November 24, 26 and December 1)

Studemund, Chapter 13

Chaloupka, Frank J. and Henry Wechsler. 1996. Binge Drinking in College: The Impact of Price, Availability, and Alcohol Control Policies Contemporary Economic Policy (October) 14:4, 112-123.

Leonhardt, David. 2005. To Reduce the Cost of Teenage Temptation, Why Not Just Raise the Price of Sin? The New York Times (July 25): C3.

XIV. Simultaneous Equations (December 3 and 5)

Studenmund, Chapter 14

XV. Forecasting (December 8 and 10)

Studenmund, Chapter 15

The Economist. 1992. America Extrapolated: Tomorrow Will Be Different (Dec 21 - Jan 3) 25-27.

Fair, Ray C. 1996. Econometrics and Presidential Elections Journal of Economic Perspectives (Summer) 10:3, 89-102.

Fair, Ray C. 2006. The Effect of Economic Events on Votes for President: 2004 Update (November 1)

Ray Fair's Presidential Vote Equation

Maintained by: netusil@reed.edu
Updated August 23, 2008