ECON643 Empirical Analysis I: Foundations of Empirical Research

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1 University of Maryland Fall 2015 Instructor: Prof. Ephraim Leibtag Phone: TA: Burak Turkgulu, Class Location: th Street NW Department of Economics Masters in Applied Economics ECON643 Empirical Analysis I: Foundations of Empirical Research Class Meeting Time: Thursday, 6:45-9:30 PM (with a 15-minute break from approximately 8:00-8:15) Office hours: Thursday, 5:45-6:45 and by appointment Course Description This course is an introduction to the fundamental aspects of empirical economic research. You will learn key concepts related to sampling, descriptive statistics, probability theory and application, confidence intervals, hypothesis testing, and regression analysis. You will be required to use EXCEL and STATA to apply these concepts to actual data. Course Objectives This is the first in a three-course series in empirical analysis required for the Masters in Professional Studies in Applied Economics. At the end of the course, you should be able to: Understand sampling methods and sampling distributions. Use probabilities and probability distributions to assess the likelihood of events. Use actual data to generate and interpret descriptive statistics. Estimate parameters of common discrete and continuous probability distributions. Understand the concept of hypothesis testing and conduct hypothesis tests using economic data. Calculate and interpret confidence intervals for population means and proportions. Estimate and interpret linear regressions and use regression results to make predictions. Demonstrate the ability to use STATA to analyze data. Understand, evaluate and analyze economic data and interpret statistical evidence from economic data Apply empirical evidence to assessing economic arguments and communicate economic ideas to a broader audience Required Course Materials Statistics for Business and Economics, 8th edition, by Paul Newbold, William L. Carlson and Betty Thorne. Pearson/Prentice Hall, ISBN# STATA: See for details on purchase options and for pricing options. The least expensive appropriate option is $75 for a 6-month license for Stata IC. A one-year license is $125, and a perpetual license (that never expires) is $198. UMD does not recommend Small Stata as it is too limited for the coursework in our program. Under the Gradplan, you may install

2 Stata on up to three different computers. You may also eventually upgrade your version of Stata and your license, at a discount, if you wish. A Gentle Introduction to Stata, Fourth Edition, by Alan Acock, Stata Press ( Microsoft Excel and Analysis ToolPak: See for download instructions. Course Website: If you are registered for this course, you can use your directory ID and password to access myelms.umd.edu. Copies of this syllabus, lecture notes, problem sets, and other relevant documents will be made available through the course website. Prerequisites: All students admitted to the Masters in Professional Studies in Applied Economics program have satisfied prerequisites for this course. Class Schedule (any changes will be announced in class) Date Topic Discussed and Assigned Chapters from Statistics for Business and Economics (Newbold) and A Gentle Introduction to Stata (Acock) September 3 Introduction to Economic Data and Descriptive Statistics Newbold 1 and 2 September 10 Fundamentals of Probability Newbold 3 September 17 Discrete Probability Distributions; Introduction to Newbold 4 +Acock 1 STATA September 24 Continuous Probability Distributions; STATA Part II Newbold 5 +Acock 4 October 1 Sampling Distributions; STATA Part III Newbold 6 +Acock 5 October 8 Hypothesis Testing Newbold 7 and 8 October 15 Single Population Estimation and Confidence Intervals; Newbold 9 and 10 STATA Part IV October 22 Introduction to Regression Analysis Newbold 11 and 12 October 29 STATA Part V: Bivariate Regression in STATA Newbold 12 +Acock 8 November 5 Student Presentations of Research Projects and Catch Up NA November 12 Student Presentations of Research Projects; Final Exam All Chapters Review November 19 Final Exam All Chapters Coursework Class Participation (10%): Your end-of-semester participation grade will be a function of both the quantity and quality of your class participation. Strong class participation includes both responding to questions posed in class as well as asking relevant and related questions for discussion during lecture. Online Discussions (5%): Each week, we will have a graded online discussion on topics that we discuss in class. The online discussions will take place in ELMS and be open each week on Tuesday morning. The weekly discussions will be open for your participation until midnight on Thursday night. In-Class Assignments (10%): There will be four in-class assignments during the semester that will include review questions and exercises to check your understanding of recently discussed material and stimulate thought in current topics of discussion. You will work with one another on the problems in groups of 2-3 students each, but each student will turn in his or her own answers. 2

3 Problems Sets (25%): There will be four problem sets assigned throughout the semester. Problem set responses will be submitted electronically via to our TA, Ben Zou, prior to class on the designated due date (see below) and all work will be graded and returned electronically. Students are encouraged to consult with classmates in completing the problem sets. Students are allowed to give and receive help on the problems. However, students are NOT allowed to copy part or all of another student's problem set or allow another student to copy part or all of his/her own problem set. Journal Article Summary and Analysis Paper (12.5%): The concepts presented in this course are applied in many academic economic journal articles. You will choose one journal article to read and write a short paper (4-8 pages) on the article. You will summarize the findings and methods used in the article, analyze the results, and connect the article to at least two topics that we have discussed in class. Applied Economics Project Presentation (12.5%): One of the goals of this program is to prepare you to be able to apply the tools of applied economics and then to present your findings to a non-technical audience. For this assignment, you will be assigned a two-person team that will prepare an 12-minute presentation that presents results of a data analysis that you have conducted that shows your ability to apply the concepts presented in this course. Final Exam (25%): The final exam will be given on the last day of class and will be 120 minutes in length. The exam will be a comprehensive, closed book exam covering ALL material discussed throughout the course, including lecture slides, textbook and other reading material, in-class assignments and problem sets. Assignment and Test Dates Assignment 1 Assigned Due 2 Assignment Assigned Due Problem Set #1 9/10 9/24 Analysis Paper 9/24 11/5 or 11/12 Problem Set #2 9/17 10/1 Presentation 10/1 11/5 or 11/12 Problem Set #3 10/8 10/22 Final Exam 11/19 (6:45-8:45) Problem Set #4 10/22 11/5 Information about exams and class assignments can also be found on our class website at myelms.umd.edu. Student-Faculty Interaction Student attendance and participation during class as well as online for weekly discussions are essential for successfully completing this class. I will be available before class sessions for consultation and will provide virtual office hours by and/or phone between class meetings. Grading Grades for the course will be determined as follows: Assignment Value Percent Assignment Value Percent Problem Sets 100 points (25 each) 25% Journal Article Paper 50 points 12.5% 1 A calculator is recommended for all in-class assignments, problem sets, and exams. 2 There is a three percent deduction per week for any work submitted after the due date. 3

4 Weekly Online 20 points 5% Project 50 points 12.5% Discussions Presentation Class Participation 40 points 10% Final Exam 100 points 25% In-Class Assignments 40 points (10 each) 10% Total Semester Points 400 points 100% Letter Grade Points Needed %Needed Letter Grade Points Needed %Needed A 372 points or more 93% C % A % C % B % D % B % F 239 and below B % Please note: The graduate school requires that students maintain a minimum GPA of 3.0 (B) in order to maintain good academic standing. Students whose cumulative GPA falls below 3.0 are not making adequate progress in the program. Thus, a grade of B- or worse in this course is an indicator of inadequate progress in the program. University of Maryland and Department of Economics Policies is the primary means of communication outside the classroom, and I will use it to inform you of important announcements. Students are responsible for updating their current address via AND for paying attention to messages I send to the class via ELMS. I will do my best to respond to within 48 hours. Contact Hours: Three credit courses at the University of Maryland require a minimum amount of contact between instructors and students. Our courses 12 weekly 3-hour meetings only satisfy 80% of the university s contact requirement. The other 20% is usually satisfied by mandatory and graded online contact. Instructors have some discretion in how they structure the online component of their course. In principle, the contact hours requirement could also be satisfied by scheduling 3 additional 3-hour meetings per term, or one additional 45-minute meeting per week. The online components of our courses are a more flexible way to ensure that our program s courses provide the same level of student-instructor contact as a traditional 15-week, face-to-face, 3-credit course at the University of Maryland. Work Load: Mastering the material covered in this course requires a significant amount of work outside of class. Students should expect to spend more time outside of class than in class typically at least twice as much time. The courses in our program are 12-week courses that cover all the same material as a traditional semester-long 3-credit course. The compressed schedule makes it possible to complete our degree in just 15 months if you take 2 courses each term. But the compressed schedule also implies an accelerated pace. Academic Integrity: The University of Maryland has a nationally recognized Code of Academic Integrity, administered by the Student Honor Council. This Code sets standards applicable to all undergraduate and graduate students, and you are responsible for upholding these standards as you complete assignments and take exams in this course. Please make yourself aware of the consequences of cheating, fabrication, facilitation, and plagiarism. For more information see Student Conduct: Students are expected to treat each other with respect. Disruptive behavior of any kind will not be tolerated. Students who are unable to show civility to one another or myself will be referred to the Office of Student Conduct. You are expected to adhere to the Code of Student Conduct. 4

5 Medical Excuses: If you miss any class meetings for any reason, you are still responsible for all material covered during the meeting you missed. It is your responsibility not the instructor s to get yourself caught up in the course. If you need to miss an exam or other course deadline because of illness, injury, or some other emergency: Follow doctor's orders and get documentation. Get in touch with the instructor as soon as you re able preferably prior to missing the exam or deadline. Communicate with the instructor to make up the course requirement as soon as possible. You are entitled to recover before you make up the course requirement, but you are not entitled to extra days to study beyond the time the doctor's note says you re incapacitated. If you are incapacitated for more than a week or so beyond the end of the term, your grade in the course will be an Incomplete. Once you make up the course requirement the instructor will change your "I" to the appropriate letter grade. School Closings and Delays: Information regarding official University closing and delays can be found on the campus website and the snow phone line: (301) 405-SNOW ( ). Students with Disabilities: The University of Maryland does not discriminate based on differences in age, race, ethnicity, sex, religion, disability, sexual orientation, class, political affiliation, and national origin. Reasonable accommodations will be made to students with documented disabilities. I will make every effort to accommodate students who are registered with the Disability Support Services (DSS) Office and who provide me with a University of Maryland DSS Accommodation form. Academic Progress: The graduate school requires that students maintain a GPA of at least 3.0. Students whose cumulative GPA falls below 3.0 will be placed on academic probation by the graduate school. Students on academic probation must ask the program s director to petition the graduate school if they want to remain in the program. The petition must include a plan for getting the student s GPA up to at least 3.0. Students who do not live up to their plan can be forced to leave the program without having earned the degree. Building Access: The door to the building at th Street is unlocked on weekdays until 7:00 p.m. Students who arrive after 7:00 will find the door locked. The building s security guard is stationed at a desk just inside the door until 11:00 p.m. and will let you in. You can also call the phone on the security guard s desk by dialing (202) If the security guard happens to be away from his or her desk when you arrive, you can pick up the black phone to the right of the door at th Street. You will be connected to the company that handles security for our building. If you tell them you are with the University of Maryland, they should ask you for a password. The password is Drawbridge. When you tell them the password, they will be able to unlock the door for you. 5

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