Research topics

C21EM Econometric methods 2022-23- Economic question and framework: what was the impact of the meltdown on the returns for GPU (the owner)? Framework is the capital asset pricing model (CAPM). Econometric framework: event study, monthly returns data for GPU. Results: discussed in the lab.

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C21EM Econometric methods 2022-23

Project writeup guidelines

 

Submission guidelines

 

The maximum word length is 4,500 words.  Non-essential graphs, additional regression results, supporting materials, etc., should be put in appendices and not in the main text of the project.  Appendices, list of references, graphs and tables do not count towards the 4,500 word limit.

 

Please use either 1.5 spacing or double spacing.

 

 

General guidance

 

Broadly, a typical writeup has 3 main components (excluding things like the intro, conclusion, etc.):

  1. What is the ECONOMIC question you are investigating, and what is the ECONOMIC analytical framework you are using?
  2. What is the ECONOMETRIC framework you will use, and what data will you will apply this framework to?
  3. What are your RESULTS?

Both #1 and #2 will have “literature review components”. I’ve put “economic” and “econometric” in upper case to emphasise the difference.

 

We can put two of the examples in the labs into this framework.

 

Three Mile Island nuclear accident:

  1. Economic question and framework: what was the impact of the meltdown on the returns for GPU (the owner)? Framework is the capital asset pricing model (CAPM).
  2. Econometric framework: event study, monthly returns data for GPU.
  3. Results: discussed in the lab.

 

Minimum wage impact on employment in fast food restaurants:

  1. Economic question and framework: what is the impact of raising the minimum wage on employment? Framework is labour economics analysis of labour demand and supply.
  2. Econometric framework: differences-in-differences, employment and wage data for restaurants in NJ and PA.
  3. Results: discussed in the lab.

 

Here is a possible detailed format for the writeup:

  1. Introduction: Provide a summary of the question(s) you wish to investigate or have investigated, why they are interesting/important. Also mention the contents of each section of your written project.
  2. Literature review: Summarise the relevant economic literature in your topic area. You may wish to have this as a standalone section or include it with #3 and #4 below (the economic model and the econometric framework). Either approach is fine and commonly used in economics papers.
  3. The economic model: Specify the general economic approach and model that you are going to use and define the economic variables. You will find that in almost all cases such models can be found in existing literature. State the model’s assumptions and identify what it is you are trying to estimate.
  4. The econometric framework: What is the econometric framework or method you will use to estimate your specified economic model? You will again find that in almost all case the econometric framework is a well-established one in the existing literature that has been used for this or similar economic applications.  You may discuss the variables, the functional form, the error assumptions of the model, etc.

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  1. The data: Describe the data you use, the sources of the data, and how/why the data are appropriate for the topic at hand. Produce and briefly discuss descriptive statistics of your main variables. You may also want to provide some graphs, depending on the topic and data.
  2. The estimation results and their interpretation: Report the estimation results and discuss. Your discussion should include things like interpretation of estimated coefficients and their magnitudes, how they relate to the economic question being investigated, how precisely coefficients are estimated (are the SEs big or small? are the confidence intervals wide or narrow?), potential problems or limitations of the results, etc.
  3. Summary and conclusions: Self-explanatory.
  4. References: A complete list of the literature that you cite in your project plus the data sources you used.

 

 

Presentation of results

 

Please pay careful attention to the written presentation of your project. In particular, the style used for presentation of results should be similar to what you see in the Stock-Watson and other textbooks and in economics papers.  For example, a standard style for presenting the regression results from one of the labs where we look at the birthweight example could look something like this:

 

Regressor: Model 1 (no controls) Model 2 (with controls)
Smoker -253.2 (26.8) -175.4 (26.8)
Alcohol   -21.1

(73.0)
No. of prenatal visits   29.6 (3.6)
Unmarried   -187.1 (27.7)
Intercept 3432.1 (11.9) 3134.4 (44.1)
R-sq 0.03 0.09
RMSE 583.7 565.7
Number of observations 3,000 3,000

Heteroskedastic-robust standard errors in parentheses.

 

Note that every available digit from the Stata output is not reported in the table.  Reporting every digit makes the output very messy and difficult to read, and in any case the additional precision is meaningless in practice.  (The estimated coefficient in the Stata output for Model 1 is -253.2284.  Do we really believe we can get an estimated effect that is accurate to the nearest 0.1 milligram?  Even accurate to the nearest 0.1 gram is pushing it, and you could decide to report -253 instead of -253.2 in the table above if you preferred.)

 

Please report standard errors rather than t-statistics or p-values.  You may also report confidence intervals, though you may decide it’s enough to report just selected confidence intervals in the text of the writeup rather than in tabular form.

 

 

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