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ECON2206, Introductory Econometrics, 2014 S1

Course Project 1. This project has a value of 15% of the total assessment. In addition, there is a teamwork

component worth 5%. The teamwork mark will be based on the online self and peer assessment (see Teamwork Assessment section below).

2. This project must be completed in a group of 3 or 4 students. The members of a group come from the same tutorial class. Groups have been alphabetically assigned. Each group is identified by a class number (e.g. Class 2639) and a group number (e.g. Group 3). Please check the spreadsheets in “coursProjectGroups” to see the group you belong to. Each group must select one person to submit the project. Each group should start their project cooperation as soon as practical.

3. Each group must submit one hard copy of the project and one online (soft) copy.

4. The online submission deadline is 11:59pm, Tuesday, 6/ May/2014. Each group MUST submit the online copy to Turnitin on the course Blackboard. A link to the project submission will be available in Week 9. Only one member of the group should make the submission – that person must be nominated on the Group Cover Sheet.

5. Each group MUST also submit a hard copy to your tutor at the beginning of your Week 9 tutorial.

6. For both online and hard-copy submission, the project Cover Sheet must be properly filled, which includes the class number, group number, names and student numbers of the group members.

7. A late-submission penalty of 20% (3 marks) will apply for each 24 hours late. This applies to both the hard copy and the soft copy submissions.

8. For hard-copy submission, DO NOT use plastic sheets or binders. Simply staple the pages together. Do not submit loose-leaf sheets of paper.

9. Each student MUST complete a confidential online self and peer assessment by11.59 pm, Tuesday, 13/May/2014. Details about this teamwork assessment will be announced shortly. No marks will be awarded for this teamwork component, which is worth 5%, if the self and peer assessment is not completed by the deadline.

10. All submissions will be checked for plagiarism. The University regards plagiarism as a form of academic misconduct, and has very strict rules regarding plagiarism. Where it can be established that individual students are responsible for the plagiarism, those individual students will be penalised. However, where it is judged that the plagiarism should have been clear to the other group members, the penalty will apply to all members of the group.

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ECON2206, Introductory Econometrics, 2014 S1

Course Project*

Group Cover Sheet

Check-list 1. Choose one member to submit the project: one soft-copy to be submitted

online and one hard-copy to be submitted to your tutor. 2. Class number, group number, all names and student numbers of the group

must be filled in on this Cover Sheet. 3. Each group member must complete the online self and peer assessment.

Marks on teamwork will be zero if this assessment is not completed by the deadline. Details about the teamwork assessment will be announced shortly.

Class: ________ Group: __ Full Name Student No. 1. (person for submission)

2.

3.

4.

* Pay attention to the ways to report your regression results (Section 4.6 of the textbook). * Your report should not exceed 8 pages (exclusive of this cover but inclusive of STATA commands and relevant output). Staple your pages together. Do not submit loose pages. Do not use plastic sheets or binders. For online submission, the file size of your soft copy must not exceed 20MB.

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Project Description Suppose you are an intern in a consulting firm that provides businesses and government agencies with advices on various social and economic issues. You are involved in the project of advising a pharmaceutical company that is interested in penetrating the market of Luckland (a country endowed with rich natural resources). Your supervisor, the project manager, needs some vital facts about the adult population of Luckland and asks you to answer the following questions.

(i) What are the main characteristics of the adult population: weight, height, age, gender, smoker or not, married or not, income, education?

(ii) What is the proportion of individuals who have kids and currently smoke? (iii) What are the main factors that influence an individual’s weight? (iv) How does the income influence an individual’s weight, ceteris paribus? (v) How does the education level influence an individual’s weight, ceteris paribus? (vi) Is there any evidence that smokers weigh less than non-smokers, ceteris paribus? Is

there any evidence that smoke-quitters (those having quitted smoking) weigh more than non-smokers, ceteris paribus?

(vii) What is the expected (or mean) weight of a single male, non-smoker, 35 years of age, childless, 170 centimeters tall, with a trade certificate and an annual income of 30 thousand Luckland dollars?

Your supervisor instructs that you use the linear regression model

log(𝑤𝑒𝑖𝑔ℎ𝑡) = 𝛽0 + 𝛽1 log(ℎ𝑒𝑖𝑔ℎ𝑡) + 𝛽2 log(𝑎𝑔𝑒) + 𝛽3𝑓𝑒𝑚𝑎𝑙𝑒 + 𝛽4𝑖𝑛𝑐 + 𝛽5𝑖𝑛𝑐2 + 𝛽6𝑠𝑖𝑛𝑔𝑙𝑒+ 𝛽7𝑘𝑖𝑑𝑠 + 𝛽8𝑡𝑒𝑟𝑡 + 𝛽9𝑑𝑖𝑝𝑙𝑜𝑚𝑎 + 𝛽10𝑡𝑟𝑎𝑑𝑒 + 𝛽11𝑠𝑚𝑜𝑘𝑒 + 𝛽12𝑞𝑢𝑖𝑡 + 𝑢

to find the answers to questions (iii)-(vii), where 𝛽𝑖s are parameters to be estimated. In addition to answering the questions (i)-(vii), you are encouraged to comment on the adequacy of this model for analyzing the questions. You have access to a data set from a recent national health survey of Luckland, which can be regarded as a random sample. The data description is in the file “NHS.des” and data are in the file “NHS.raw”. Read “NHS.des” carefully and make sure that you understand the meaning of each variable in the data set and the above model. In your report, the “Executive Summary” section should contain a list of brief answers and conclusions to questions (i)-(vii). In the “Main Report” section, you should report statistical inference details that justify each of your answers and conclusions in the “Executive Summary”. In the “Further Issues” section, you should comment on the adequacy of the model and the likely shortcomings of your analysis. In the “Appendix” section, in addition to reference (e.g. the textbook), you should attach the STATA do file and relevant output for the project (but not data printout). Further, you do want to impress your supervisor and colleagues by submitting a nice report that is correct, well-written and well-presented. You are supposed to use learned materials up to the end of Chapter 7 to complete this project.

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Project Guide Lines • Please read thoroughly the Project Description, and data description file, before attempting

questions. • Each group is expected to submit a report that consists four sections: Executive Summary,

Main Report, Further Issues, and Appendix. The required contents of these sections are briefly stated in the project description. There are 15 marks in total, distributed as follows: - (i), (iii) and (vi) weigh 2 marks each; - (ii), (iv), (v) and (vii) weigh 1.5 marks each; - Further Issues weighs 2 marks; - Overall presentation (including Executive Summary and Appendix) weighs 1 mark.

• The computation work should be carried out in STATA. You should be able to write your own do file by modifying suitable do files from previous computation exercises. The do file for this project should be presented in the Appendix and should be no more than one page.

• In the “Further Issues” section, students are expected to comment on the adequacy of the given model and shortcomings of the analysis. One way of thinking about possible issues is to examine “realistically” whether or not the Gauss-Markov assumptions hold for the scenario considered.

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Teamwork Assessment (5 marks) The Course Project provides an environment for students to cooperate with one another to bring out the best of a group. Students in a group are expected to make effective and positive contributions to the project. More specifically, students are expected to (and certainly expect their team members to)

a) contribute positively to task planning and coordination;

b) help to raise the team morale;

c) attend meetings punctually and be well prepared;

d) communicate/discuss with team members constructively;

e) share ideas generously and be able to build on other’s ideas;

f) resolve disagreements with team members respectfully;

g) complete allocated tasks with quality and in time;

h) provide support and help to team members;

i) demonstrate good knowledge and skills for the project.

At the completion of this project, each student is required to give the following confidential assessment for each teammate (including herself/himself) online:

Please rate this person’s overall contribution to the project.

(0 = nil; 1 = very low; 2 = low; 3 = satisfactory; 4 = high; 5 = very high)

Your assessment should be based on the criteria in the list a)-i) above. Each student, who completed this assessment, will receive a Teamwork mark that is a summary of the self and peer assessment. The details for completing this assessment online will be announced shortly.