ECON 351 - Lecture 1 - Intro to

Econometrics

Maggie Jones

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Syllabus Overview

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Course Details

Location: Jeffrey, Room 126Times: Monday @ 4-5:20pm & Wednesday @ 2:30-3:50pmWebsite: http://www.econ.queensu.ca/econ351

Instructor: Maggie Jones (jonesm@econ.queensu.ca)Office: Dunning Hall, Rm 345Office Hours: Wednesday @ 4-5:30pm & Thursday @ 8:30-10am

Teaching Assistant: Sergei Shibaev (shibaevs@econ.queensu.ca)Office: Mac-Corry A425Office Hours: TBA

Teaching Assistant: Justin Quinton (quintonj@econ.queensu.ca)Office: Mac-Corry A425Office Hours: TBA

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A Note on Emails

I Feel free to email me with administrative questions

I Do not email me with a specific econometric question, but docome see me in office hours to discuss

I e.g. I am having difficulty with deriving part a of question 2,how do you set up the problem?

I e.g. Is this the right formula to use in question 3 of theassignment?

I e.g. I am having trouble understanding the concept we wentover today in class, could you clarify for me?

I If you do not have a laptop, you are welcome to send me Stataoutput, or screenshots of a problem you are encountering withStata that you wish to discuss in office hours

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Course Goals

1 Work through the mathematical derivations and theory behindthe econometric methods presented.

2 Use Stata to conduct econometric analysis to address a variety ofeconomic questions.

3 Interpret, analyze and critique economic journal articles andnews articles.

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Textbook

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Other helpful references

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Software

I This course will rely heavily on the use of Stata, a statisticalsoftware used frequently in economics.

I You may purchase a copy of Stata online (link in syllabus) anduse GradPlan ID: AWG15.

I Note that if you must purchase the Stata/IC— version orabove, as lower versions are not able to handle some of thedatasets we will be using.

I If you do not wish to purchase a copy of Stata, the computerroom in Dunning 350 (open Monday-Friday 8:30am-10:00pm)is equipped with several machines with Stata.

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Tutorials

I Sept 19th-23rd there will be tutorials each day in thecomputer lab from 10-11:30am

I You can choose to attend one that fits your schedule

I We will be going through an introduction to Stata

I You are not required to attend, but are strongly encouragedto attend

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Grading Scheme

All components of this course will receive numerical percentagemarks and will be converted to letter grades based on the QOGCS:

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Grading Scheme

1 Assignments 5 @ 6% each = 30% total (students can work onassignments in groups of up to 3)

2 Midterm @ 25%: October 19th and will cover everything fromSept 12th-Oct 17th

3 Final @ 45%: the final exam will be cumulative

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Outline

1 Intro and review of math and stats (Sept 12th-21st)I Wooldridge Ch 1, App A (on your own), B,C

2 Basics of Ordinary Least Squares (Sept 26th-Oct 12th)I Wooldridge Ch 2-4

3 Midterm Review (Oct 17th) and Exam (Oct 19th)

4 Issues in Ordinary Least Squares (Oct 24th-Nov 9th)I Wooldridge Ch 5-8

5 Advanced Topics in Econometrics (Nov 14th-23rd)I Wooldridge Ch 13-15

6 Introduction to Time Series (Nov 26th)I Wooldridge Ch 10

7 Final Exam Review (Nov 30th)

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Additional Info

I Academic Integrity: don’t cheat!

I Course Website: http://www.econ.queensu.ca/econ351

I Accessibility: course materials are available in an accessibleformat or with appropriate communication supports uponrequest

I Accommodation: if you need any type of accommodationsplease contact Queen’s Student Accessibility Services as soonas possible

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What is econometrics?

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Econometrics is based upon the development of statisticalmethods for estimating economic relationships, testing economictheories, and evaluating and implementing government andbusiness policy.

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Why study econometrics?

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Identify Causality

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Understand what we read in the news

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To Validate and Quantify Economic

Theory

Examples of empirical questions in economics:

I What is the impact of education on earnings?

I How important is discrimination for wage differences?

I Does immigration reduce wages of non-immigrants?

I How big is the multiplier from government spending?

I Does foreign aid to poor countries promote growth?

I What is the effect of advertising on firm revenue?

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The Empirical Analysis

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Empirical Analysis

I Formulation of a question of interest

I Often motivated by an economic modelI e.g., Becker (1968) model of criminal behaviour: involvement

in crime the result of utility maximizing behaviour

I Or, driven completely by economic intuition:I e.g., relationship between wages and schooling:

wage = f(education, experience, training)

I Economic model is then converted into an econometricmodel

I an equation relating the outcome variable to a set ofexplanatory variables and an unobserved component

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Ingredients of an Empirical Analysis

I Data: different types of data (cross-sectional, time series,pooled cross sections, panel data)

I Estimation: summarizes relationships between variables usingeconomic models and statistics

I Inference: assesses reliability

I Theory/Interpretation: related to economic model? causalinterpretation?

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Economic Data

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The Structure of Economic Data

Cross-sectional data: individuals, firms, households, etc,observed at one point in time

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The Structure of Economic Data

Time series data: observations on a variable or several variablesover time

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The Structure of Economic Data

Pooled cross sections: independent cross sections collected atdifferent points in time are combined in a single data set

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The Structure of Economic DataPanel data: a time series for each cross-sectional member in thedata set

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