Department of Economics

Johannes Kepler University

IK Ökonometrie II, Winter 2009/10
Dr. René Böheim

 

Type Intensifying Course (IK)
Language English
Room HF 9915
Time Tue, 10:15-11:45, every other week
ECTS credits 2.00
Requirements Course (KS) and Intensifying Course (IK) "Ökonometrische Modelle" (OR SIMILAR!!!)
Start 06-10-09
Lecturer René Böheim
Office hours Wed, 9-10am and by appointment
Textbook Wooldridge, Jeffrey M. (2003, 2006 or 2009), Introductory Econometrics: A Modern Approach, 2nd Edition or higher, South Western College Publishing, Mason (Ohio).
Final Exam 26-01-10
Next offer Winter 2010/11
Registration
Via KUSSS



COURSE PROCEDURE:


  • Before the meeting
    • You should attend the course by René Böheim--it is OK, if you heard this (or a similar course) in a previous semester.
    • You must be familiar with STATA, see Martin Halla's courses.
    • Reading assignment from Wooldridge.
    • Prepare each problem set (consisting of different exercises).
  • During the meeting
    • Assigned students will present the problem sets.
    • General discussion of the motivations, intuitions, and analytics of each exercise.
  • After the meeting
    • Recapitulate the whole problem set for yourself.

TIMETABLE


Master copies of the additional literature are available from the secretaries' office, Ms Meister or Mr Reitberger, room K149D.

TIME & PLACE TOPIC
PROBLEM SET
Tue, 06.10.09, 10:15-11:45, HF9915

Basic Regression Analysis with Time Series Data (Ch. 10) > Read me!



Tue, 20.10.09, 10:15-11:45, HF9915 Further Issues in Using OLS with Time Series Data (Ch. 11) PS-1

Tue, 10.11.09, 10:15-11:45, HF9915 More on Specification and Data Problems (Ch. 9)
Individual Appointments (Empirical Project)
 
Tue, 24.11.09, 10:15-11:45, HF9915

Serial Correlation and Heteroskedasticity in Time Series data (Ch. 11) 

 

Excercises:

C11.4

C11.5

C12.10

Tue, 15.12.09, 10:15-11:45, HF9915 Instrumental Variables Estimation and 2SLS (Ch. 15)
Simultaneous Equation Models (Ch. 16) 
PS-4
Tue, 26.01.10, 10:15-11:45, HF9915 Presentation of Empirical Projects  

GRADING


Grades in the course will be determined through a combination of practical exercises (take home problem sets), an empirical project and a take home exam. The task of the take home exam will be to write a so-called referee report. Each subject will be discussed in detail below. Weighting will be as follows:

  • Problem sets: 40%
    • Number of exercises: 30%
    • Quality of presentation: 10%
  • Empirical project: 40%
  • Take home exam (referee report): 20%

Each subject will be graded according to the Austrian system of scholastic grades. [This is a 5-point grading scale, where 1 ("sehr gut" - "very good") is the best possible grade, 2 ("gut" - "good") is the next-highest, 3 ("befriedigend" - "satisfactory") indicates "average" performance, 4 ("genügend" - "adequate") is the lowest passing grade and 5 ("nicht genügend" - "unsatisfactory") is the lowest possible grade and the only failing grade.] Your final grade will be a weighted average over the three subjects.

PROBLEM SETS


The problem sets can be downloaded next to the relevant date in the table above. Each problem set consists of 5 practical exercises. To solve the problem sets, you are free to use any calculator, computer, or software package. Before the lecture you register which exercises you have completely solved. In order to register for an exercise it is necessary that you have worked and thought through the whole exercise. Of course, you may work together with other students to solve the problem sets. However, each of you must be able to explain the solution to the class clearly. The grading for this subject will be as follows:

Share of solved exercises Grade
100%-90% very good
89%-80% good
79%-70% satisfactory
69%-60% adequate
>60% unsatisfactory

Please make sure, when you are assigned to present the solution to an exercise in class that you do that in a clear and efficient way. I suggest you save a log-file or any text-file with your solutions in your email account!

EMPIRICAL PROJECT


For this course, you have to carry out an empirical project. Make sure to read Wooldrige, Chapter 19, which discusses the ingredients of a successful empirical analysis. Although I will provide some suggestions for projects, it is best if you research your own project. Make sure you are really interested in the topic as you will be working on this for the next six months and you do not want to become bored with it. (Consider this the lead-up to your thesis.)

You may not know where to begin to find a question that is interesting for both of us. One systematic way to search for an economic research question is to consult the Journal of Economic Literature, JEL (link). The JEL classification system quickly narrows the research areas and you may search databases such as RePec, using the classification system. (Advanced students should aim to read JEL on a regular basis, it is one of the best journals economists have.)

On having found an adequate research question, you should read (some of) the existing literature, aim to read the latest relevant publications in the better journals. (See, for example, the Handelsblatt's ranking of journals.)

The next step, data collection, can be exciting, but also frustrating. The best way is to first think carefully about which kind of data you need to answer your question, e.g.,  what is the relevant unit of observation (individuals, firms, countries, etc.)? If you have a good research question but you do not find appropriate data, please contact me (but search first!).

The choice of econometric methods is in principle yours, but you will have to use one or several of the methods taught in the course Econometrics II, i.e., time-series analysis, 2SLS/IV, and/or panel-regression. This should not prevent you from exploring other methods! However, you will have to justify your choice of econometric technique.

On having decided on the question and the data, your next steps are the inspection, cleaning and description of the data. Then formulate an econometric model and choose the appropriate method of estimation. In that step the existing literature may help you a lot.  A good paper contains also some robustness checks of the main results. To sum, an empirical project involves the following steps:

  • The research question -- what and why?
  • Review the existing literature -- keep it short and precise, but strive to address the important aspects.
  • Decide on an appropriate data set
  • Inspect, clean and summarize your data
  • Formulate an econometric model
  • Estimate the model
  • Interpret the results
  • Carry out some robustness checks
  • Write up your results
  • Check and correct spelling!
  • Check and correct grammar!
  • Check and double-check references!

For details, please refer to Wooldridge's Chapter 19. The typical outline of the paper:

  • Statement of the research question
  • Short review of the literature
  • Formulation of the econometric model
  • Data sources and descriptive statistics
  • Model estimation
  • Interpretation of results
  • Report on robustness checks
  • Conclusions
  • Limitations of the project
  • Possible extensions
  • References -- be extremly precise! If in doubt, cite too often than not enough! There are zillions of style guides.
  • Appendix
  • Tables
  • Graphs

The paper should be between 7 and 15 pages long (spacing one and a half lines and a 12-point serife font), excluding any graphs and tables. Put all the figures and tables in the Appendix.

At the end of the term you will have to present your empirical paper in class. Details on the presentation will be announced!

A few remarks from my past experience:

  • Do not wait too long thinking about the project, time flies!
  • Make sure you contact me early when you are in doubt or have troubles!
  • Use the available resources: library and internet -- I'm neither "google", "bing" nor "Ask Jeeves"!
  • Read "The standard error of regressions" (McCloskey and Ziliak, 1996, Journal of Economic Literature, 97--114)
  • Use a dictionary and a spell checker. Sloppy writing indicates sloppy thinking. (Buy McClosekey, 2000, Economical Writing. Read it.)

And, above all, have fun carrying out the project!

TAKE HOME EXAM


At the end of the semester you will have a take home exam (individual effort!). This exam will require you to write a so-called referee report on an economic research paper you will receive via email. You will have 48 hours to work on your report. No late exams will be accepted! Due to the time constraint I strongly encourage you to work through the task of an academic referee in advance.

What is a referee report?

A referee report is a critique of an unpublished academic research paper. E.g. the Wikipedia entry on ‘peer review'.

How to write a referee report?

In order to learn how to write a referee report read Chapter 3 (pp. 103-118) of Thomson, William (2003), A Guide for the Young Economist, M.I.T. Press, Cambridge.

Guidelines:

The referee report should be no more than 3 pages (one and a half spaced, 12-point font). You should first provide a brief summary of the paper. In the main part of the report comment on the empirical model and the results. In particular, evaluate the empirical implementation and point out potential shortcomings. In other words you should write a critical assessment of the paper, not simply a summary!

Academic misconduct

Please note that any forms of plagiarism or other forms of academic misconduct will not be tolerated!This inicludes submitting an old research paper.

USEFUL LINKS


Ad Stata

Where to get information/data?

Where can I find scientific literature?

Bibliographic databases, e. g. for economics:

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