Course Number: 90-770

Applied Econometrics I

Units: 12

The tasks of the applied econometrician are to employ observations or data (generally historical, but sometimes experimental) to : (1) test predictions of various social science theories, and (2) quantify the effects predicted from these theories. Applied econometrics involves application of economic and statistical theory to interpret data generated by economic systems. The primary objectives of this course are to help the students become /discriminating consumers and producers of econometric studies. This requires consideration of formal statistical models, but considerable attention is also devoted to implications for interpreting empirical studies.

Due to the nature of economic theorizing, the most common framework for empirical studies is the multiple (linear) regression model. Topics to be covered in the first semester are: (1) the standard linear model, (2) heteroskedasticity, (3) multicollinearity, (4) serial correlation, and (5) errors in variables. Topics in the second semester include (1) limited dependent variables, (2) simultaneous equation models, and (3) time series models.

Students will be required to write a short paper each semester. In the Fall the paper will involve a critique (in plain English) of a policy-relevant econometric study. The Spring paper will involve formulation and implementation of an econometric study useful for policy purposes. All computer work can be done with standard packages such as STATA and RATS.

Faculty:
Melvin Stephens
Victor Pontines