Your final project for this course is a chance for you to demonstrate what you have learned about...

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Your final project for this course is a chance for you to demonstrate what you have learned about econometrics. To

do this, you will be creating and executing your o

wn econometric study! So, take some time to come up with a question

that interests you (it could come from econ or another subject or theoretical basis)

and

has easily accessible data.

Have fun and be creative!

You will have two submissions related to

your project. The first will be

ONLY

a few tables of summary statistics and

regression results with a line sentence describing each regression. After approval of Part I, you will go on to do the

final write up of your paper as Part II. By me looking at you

r regressions before your final submission, you get a

chance to correct what you may have done wrong.

Note that, you can get approval early on by submitting tables days

before the deadline (You don’t have to wait for Part I deadline).

However, each submiss

ion (parts I and II respectively)

should

not exceed 5 double spaced pages

. Longer submissions are not necessarily better and will lose points if over

the page limit.

Appendices

(

Both Submissions

)

Attach copies of all STATA (or other computer program) original outp

ut, even though you have also formatted this

information into tables in the main text.

These output appendices do not count toward the page limit (though the

formatted versions of the tables within the text do). To clarify, it is required to have

both

(1

) nicely formatted tables

within the text and (2) STATA/computer output files/printouts at the end. Original figures from your computer output

may appear either in the main body or in the appendix depending on your preference. Your appendices will be dif

ferent

across Parts I and II (though you should have an appendix section in both submissions).

Data Guidelines

Your data set must have at least

50

observations and might have a lot more.

It is up to you as to where you find data.

Lots of economic

data are available on the web.

(Your data does not need to be strictly “economic.”

You should

NOT simply use data that came with the book (or other textbooks) or that is downloadable from the Statistical Software

websites. Instead, you should look for a

topic which is relevant to you and find data to test it. This is your opportunity

to do something new and creative.

Note that you will likely want to concentrate on cross

-

sectional data since we

focused on this type for most of the class (and since meth

ods vary for time

-

series and for panels). If you do still choose

an alternate type of data, you should be careful in your write

-

up to critically list any interpretation problems that may

remain especially in your conclusions section in the second submissi

on.)

The Yale Law Library has a great list of U.S. data sources at:

https://library.law.yale.edu/news/75

-

sourceseconomicdata

-

statistics

-

reports

-

and

-

commentary

, and international organizations such as the World Bank

(

https://data.worldbank.org/

) and the International Monetary Fund (

https://www.imf.org/en/Data

) also have public

use data. So do state and local government websites such as

https://data.colorado.gov/

and

https://opendata.fcgov.com/

. There’s also lots of d

ata on other things in life (e.g., financial data at

https://www.wsj.com/market

-

data

; sports data at

https://www.espn.com/

(pick a sport and then select “stats”)).

There are all kinds of other sources out there too. It is up to you where you locate data.

Instructions:

Part I of your paper should for the most part be formatted tables of results with appendices of STATA (or other

software) output. Basically, in the first submission include scatter plots of your Y and the main X variable, tables o

f

summary statistics and regression results. The regression results should have at least three (3) specifications.

2

After approval of Part I based on your submissions, you can then start writing your final paper. Your final paper (i.e.,

Part II) should

have the following, clearly labeled sections:

1.

Introduction and Statement of Research Question

•

Pose and motivate the question to be investigated with your data and econometric model.

o

Good

econometric

questions are

generally

based

on economic

theory;

however,

econometrics can be used to analyze all kinds of cause and effect relationships even if

t

hey don’t directly relate to previous theory courses. You can study just about anything

that interests you. Since the goal of the project is causal identification of the effect of

one variable on another, a good question should

specify the one primary X va

riable

and one primary Y variable

that you are interested in.

2.

Formulation of the Model

•

Express the question both verbally and in the form of an equation to be estimated. Be sure to include

the names and units of the dependent and independent variables.

•

You must include

at least three independent variables

, but can include as many as you’d like

beyond that.

•

Explain the mechanisms you believe pertain to your study question and why you selected the

particular X variables that you did and why you didn’t

select others.

•

You may also want to briefly cite relevant literature (e.g. previous studies) that you come across

while researching your topic.

3.

Data Description

•

Describe the data used to estimate the model. Your data set must have at least

40 observ

ations

.

o

You should

construct a table that provides the mean, minimum, maximum and

standard deviation

(and any other summary statistics you feel are relevant) of

all

variables

in the model.

▪

Describe the content of the table(s) in the text of your paper.

▪

You might also want to show and discuss key scatterplots or graphs of interest.

•

It is up to you as to where you find the data. Lots of economic data are available on the web (e.g.

governme

nt agency websites).

•

Your data does not need to be strictly economic though.

o

Look up Freakonomics and other work

by Steve Levitt; you can study whatever interests you. If you like sports, pull some data off ESPN;

if you like comic books, key in data fr

om a price guide; if you raise horses, you may know where to

get sales data; etc.

•

You should

not

simply use data that came with the book.

•

This is your opportunity to do something new and creative.

•

You may want to focus on cross

-

sectional data since w

e discuss this most in class, however if you

do choose an alternate type of data analysis you should be careful in your write

-

up and

interpretation.

•

To use STATA, it may be necessary to import your data from another format (e.g., Excel, ASCII,

CSV, etc.)

. To do this, use

the steps we have followed in Problem sets)

. If data you’re interested

hard to import into STATA, let me know so I can help you troubleshoot.

4.

Empirical Results

•

Present the results of the OLS estimation (and/or other appropriate tech

nique learned in class)

in the

form of a table(s).

o

Tables should be formatted as easy

-

to

-

read tables rather than cut and pasted out of

a

specific

statistical

pr

ogram

.

o

You may want to, for example, examine your key parameter estimates with and without

additional regressors to compare any differences (i.e., run a single regressor model and

then a multiple regression model).

3

•

You should show

at least three specifications

of your design

.

o

These will likely include

various non

-

linear versions of a baseline model, for example by adding a polynomial or interaction

variable, or by creating relevant categorical or binary variables to analyze group effects.

•

Explain the

meanin

g of estimated coefficients

in your model and whether or not coefficients are

statistically significant

and at what level.

•

Also discuss the

goodness of fit

measure for the model (e.g. R

-

squared, SER, adjusted R

-

squared).

5.

Summary and Discussion

•

Su

mmarize your main results and discuss limitations

to your approach.

o

Carefully explain caveats to your study, especially whether or not certain parameter

estimates may be biased.

o

Suggest what other independent variables, possible functional forms, or st

atistical tests

might be appropriate to include and any interesting follow

-

up questions or extensions that

may have come to mind.

o

Address all issues of internal and external validity.

Bibliography

•

All cited sources should be reported in a bibliography in

MLA format

.

o

One useful reference is

your textbook.

•

Also include anything relevant that is not within the main document at the end, such as

attachments

of

key STATA output (

Here I want regressi

on or summary statistics outputs, and not a series of lines of

code

)

Formatting:

•

Your report must be typed and proofread.

•

There is

no set minimum length

of your paper as long as you cover all of the requirements.

o

However, your paper should

not ex

ceed five(5) double spaced pages with 12

-

point font and

one

-

inch margins

.

o

This five

-

page maximum does not include attachments, graphs, tables etc

Your final project for this course is a chance for you to demonstrate what you have learned about econometrics. Todo this, you will be creating and executing your own econometric study!...

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