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Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
Le Van Chon
Applied Econometrics
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
What is Econometrics?
Imagine that you are hired by the government to evaluate the eectiveness of a publicly funded job training program. You are to determine what, if any, eect the training program has on each workers subsequent hourly wage. Suppose you work for an investment bank and study the returns on dierent investment strategies. Answering such questions may seem daunting at rst. Now you may have a vague idea of the kind of data to collect. By the end of this course, you should know how to use econometric method to formally evaluate a training program or strategies.
Le Van Chon Applied Econometrics
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
Econometrics has evolved as a separate discipline from mathematical statistics because it focuses on problems in collecting and analyzing nonexperimental economic data. Experimental data are often collected in laboratory environments in the natural sciences, but are much more dicult to obtain in the social sciences. Nonexperimental data, sometimes called observational data: the researcher is a passive collector of the data.
Le Van Chon
Applied Econometrics
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
An empirical analysis uses data to test a theory or to estimate a relationship. How does one go? Step 1: Careful formulation of the question of interest. Step 2: To test economic theories, a formal economic model is constructed. An economic model consists of mathematical equations that describe various relationships.
Le Van Chon
Applied Econometrics
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
E.g., individual consumption decisions, subject to a budget constraint, are described by mathematical models. The basic underlying premise is utility maximization, which leads to a set of demand equations. Quantity demanded of each commodity depends on: - the price of the goods, - the price of substitute and complementary goods, - the consumers income, - the consumers characteristics that aect taste.
Le Van Chon
Applied Econometrics
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
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What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
Le Van Chon
Applied Econometrics
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
Cross-Sectional Data
A cross-sectional data set consists of a sample of individuals, rms, states, etc taken at a given point in time. The data on all units do not correspond to precisely the same time period. We can often assume that the data have been obtained by random sampling from the underlying population. Ordering of the data does not matter. Sample selection problem, e.g., wealthier families are less likely to disclose their wealth. Look at WAGE1.
Le Van Chon Applied Econometrics
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus
What is Econometrics? Steps in Empirical Economic Analysis Structure of Economic Data Causality and Ceteris Paribus