Course (Catalog) Description
Econometrics is concerned with the testing of economic theories through the use of mathematical statistics. This course is an introduction to the science and art of building models and will explore the theory and use of regression analysis to make quantitative estimates of economic relationships. Descriptions of economic reality, testing hypotheses about economic theory, and forecasting future economic activity are topics that will be covered. Simple and multivariate regression will be studied and simultaneous-equation estimation and forecasting will be examined. State-of-the-art econometric software will be used for empirical analysis. Prerequisites: Economics 227, (Math 128 or 338, while not ideal, would be an acceptable substitute), Economics 307, and 308; or consent of instructor.
Expected Learning Outcomes (ELO)
Economics 327 is labeled as an Introduction to Econometrics. It is in fact, a follow up to the Statistics for Economics course in which regression analysis is introduced. The purpose of the course is to give an understanding of the theory and use of multivariate linear regression techniques. Specific topics discussed in the course in addition to the usual concern with the disturbance term, include time series analysis, discrete dependent variables, and simultaneous equation systems. There is also a lab component to the course which will explore the use of technological resources in carrying out applied econometric analysis. Any application of econometric techniques requires the collection and use of appropriate data. The source and availability of these data and how they may be prepared (some say "massaged" some say "tortured till they scream") will be addressed in detail in this course. You will be given ample opportunity to carry out empirical work and you will be required to complete an empirical research project with an appropriate write up.
Remember, correlation shows a relationship but regression implies cause and effect. You, the social science researcher, are the individual that determines what is the cause and what is the effect. So the first question that should always be raised is -- "What is the objective function of the model?" That is, what is the dependent or endogenous variable you trying to estimate?
You will learn econometric theory and how to specify, estimate and test simple (and some not so simple) models for economic (and non-economic) data, using a statistical computer package; choose and apply a technique for forecasting an economic variable; and understand the econometric content of published material.
Teaching Style
The course will be conducted in a lecture-discussion format. Some of the presentations will use multi-media and information will be obtained from the web. Lectures emphasize important or difficult points in the reading. You are expected to keep up on the reading and bring any questions about the reading to class. Since the course material builds over the semester, it is important that you keep up with the reading and do not fall behind. Homework from the text, empirical assignments, and a semester long empirical research project will be an integral part of the learning experience. Some of this material will be experienced in group formats. Eviews (and Excel) will be the econometric software that will be used for most empirical work.
If you have trouble with some concept or the reading, or any of the assigned work, and it is not made clear in class, I expect you to seek me out during office hours or set up an appointment. Email is another way to contact me with issues or concerns about the class but I really do dislike typing emails so face to face communications is preferred.
Honesty Policy
If you are not honest in this course (e.g., cheating on an exam, not doing your own work when required to do so), I will give you an F for the course and record the information about your lapse in good judgement with the Dean of Students. To be perfectly clear, not doing your own work when you are expected to do so (computer exercises, problems, exams, or assignments) is considered cheating unless I have said that you may work with others. If you do work with others, it is important that you put all names that contributed on the turned in work.
Students with Disabilities
Any student who, because of a disability, may require some special arrangements in order to meet course requirements should contact Professor Parcells, as soon as possible, to make necessary accommodations. (Appropriate verification will be needed).
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