University of Alberta Department of Economics Winter 2021
Introductory Econometrics Syllabus
Tuesday and Thursday 11:00AM - 12:20PM MST, online via Zoom (synchronous) Instructor: Dr. Jeffrey Penney
Email: [email protected] Office: online
Office hours: Tuesday 12:30PM - 1:30PM MST Course number: ECON 399-B1
Course description:
This course provides an introduction to econometrics: the application of regression analysis to economic data, with a particular focus on establishing quantitative estimates of causal effects rather than correlations. You will learn what regression analysis is, how to use it, and how to interpret results. This course emphasizes both the application of regression analysis and its mathematical underpinnings. An understanding of the mathematics behind the tools presented is important, and will go a long way to facilitate the understanding of the kinds of problems one can encounter. The course will make use of the Stata programming language to conduct statistical analysis.
Motivation:
Econometrics encompasses a variety of tools, and has been used to examine many different issues in economics. It is employed to assess the realism of theoretical models, determine the effects of government policies, make predictions about future variables, among other things. Some examples of what economists have attempted to answer include:
Are some teachers much better than others at helping students learn?
Do some doctors help patients convalesce faster than others?
How much can firm incentives and corporate culture reduce absenteeism?
Is there a preference to date members of one’s own race?
Do NFL football teams punt when they should instead try to get a first down?
Does the racial composition of a jury affect the probability of a conviction?
If a recession is coming, what are the leading indicators?
How did the invention of barbed wire affect agricultural productivity?
Have climate change policies reduced the job prospects of unskilled labour?
Prerequisites:
ECON 281, 282, and 299 or equivalent, and MATH 156 or equivalent. ECON 109 is also a prereq- uisite but it may also be taken concurrently with the course. These prerequisites will be enforced.
Students that lack the prerequisites will be deregistered from the class. This course is not open to students with credit in AREC 313.
Objectives:
After successfully completing the course, students should:
understand elementary regression analysis and its theoretical underpinnings
be able to critique studies that use regression analysis
have the ability to perform statistical programming in Stata
Evaluation:
The components below are intended to be a comprehensive examination at how closely the student has managed to fulfill the stated objectives of the course.
Midterm - 35%
There is one midterm that takes place during class time. It is tentatively scheduled for March 2nd. Students are required to write the midterm. Students that are not present for the midterm but have a legitimate reason for their absence will have that portion of the grade added to the final exam. Unexcused absences earn a grade of 0% for the midterm. The material covered by the midterm will be announced in advance.
Assignments - 2%
There are two assignments. Each assignment is worth 1% of the grade. Students are required to complete the assignments and hand them in before their due dates. Late assignments are not accepted; if an assignment is not handed in by the due date, a grade of zero is assigned. The first is tentatively due on February 25th, and the second on April 15th.
Laboratory Assignments - 8%
There are eight laboratory assignments. Each laboratory assignment is worth 1% of the grade.
Students are required to complete the laboratory assignments and hand them in before their due dates. Late assignments are not accepted; if an assignment is not handed in by the due date, a grade of zero is assigned. The laboratory assignments and their due dates will be announced in class.
Participation - 5%
This portion of the grade entails class participation. Asking questions, answering questions posed by the professor, and otherwise meaningfully contributing to the class are ways that students can demonstrate their participation in the course. Students are expected to treat everyone in the classroom with respect; students that are disrespectful or otherwise disruptive may lose marks from this category at my sole discretion. Regular attendance is required in order to sufficiently participate in this course.
Final exam - 50%
The final exam takes place at the end of the course during the final exam period, at a date and time that are to be determined; see Bear Tracks for more information. The exam will be two hours long. Students are required to write the final exam in order to pass the course. The exam will cover all material in the course.
The sum of the above components produces a nominal grade. A linear bell curve wherein every student’s grade changes by the same number may be applied after the calculation of the nominal grade; the direction and size of the bell adjustment is at my discretion. Grades will be rounded to at least the second decimal point. Afterwards, the grade will be translated into a letter grade, which will be the student’s final grade in the course.
Grades reflect judgments of student achievement made by instructors. These judgments are based on a combination of absolute achievement and relative performance in a class.
Textbooks and materials:
There is one required textbook. Other textbooks that are meant for a first course in econometrics can serve as additional reference.
(Required) Wooldridge, Jeffrey M. Introductory econometrics: A modern approach. 7th edition. Nelson Education, 2019. ISBN-13: 978-1-337-55886-0.
The use of earlier versions of the textbook is not recommended. The course will make considerable use of the textbook, but may deviate substantially at times.
A student solutions manual is available for this textbook, and contains detailed answers to the end of chapter odd-numbered questions and computer exercises. I encourage students to work on the practice problems in order to help master the material in this course.
The textbook contains three appendices which cover some of the requisite mathematical and statisti- cal knowledge for this course: Appendix A (Basic Mathematical Tools), Appendix B (Fundamentals of Probability), and Appendix C (Fundamentals of Mathematical Statistics).
Technology Requirements:
The class is being taught online via the Zoom software. A full list of minimum requirements can be found at this website:
https://www.ualberta.ca/information-services-and-technology/services/software-hardware-vendors/technology- requirements.html
A webcam is not required for this course. A camera (such as one that comes installed as part of a mobile phone) or a scanner is required. Students must be able to transform the images from their device(s) into PDF files.
In addition to these requisite items, students need to have the Zoom software installed. Students should sign in to Zoom using the name they are registered with at the University of Alberta; please contact me if you intend to use another name.
Some of the course requirements will require the use of the Stata statistical software, such as labo- ratory assignments. It will be introduced primarily during the lab sessions, but it may be discussed
in class as well. Alternatively, a six-month license of Stata can be purchased for approximately$48 USD at the official website:
https://www.stata.com/order/new/edu/gradplans/student-pricing/
Course outline:
The course will attempt to cover as much of the material below as possible. It may not necessarily be presented in the order listed. The chapters refer to those in the required textbook.
Chapter 1: The Nature of Econometrics and Economic Data
Chapter 2: The Simple Regression Model
Chapter 3: Multiple Regression Analysis: Estimation
Chapter 4: Multiple Regression Analysis: Inference
Chapter 5: Multiple Regression Analysis: OLS Asymptotics
Chapter 6: Multiple Regression Analysis: Further Issues
Chapter 7: Multiple Regression Analysis with Qualitative Information
Chapter 8: Heteroskedasticity
Chapter 9: More on Specification and Data Issues
Time permitting, we may also explore Chapter 13 (Pooling Cross Sections across Time: Simple Panel Data Methods) and Chapter 15 (Instrumental Variables Estimation and Two-Stage Least Squares).
Additional Resources:
Student Success Centre: The Student Success Centre (www.studentsuccess.ualberta.ca) offers a variety of learning resources, including a variety of workshops in learning effective study and exam strategies. Sessions are available in person and online, for a modest fee.
University policy and notices:
Policy about course outlines can be found in the Evaluation Procedures and Grading System section of the University Calendar.
For university regulations regarding missed assignments, quizzes, laboratory assignments, and final exam, see the University of Alberta’s Academic Calendar:
https://calendar.ualberta.ca/content.php?catoid=29&navoid=7238#Attendance
The University of Alberta is committed to the highest standards of academic integrity and honesty.
Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize them- selves with the provisions of the Code of Student Behaviour (online at www.governance.ualberta.ca) and avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, mis- representation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.
http://www.ualberta.ca/current-students/academic-resources/academic-integrity
Audio or video recording (including picture taking), digital or otherwise, of lectures, labs, seminars or any other teaching environment, whether online or in person, is permitted only with the prior written consent of the instructor or as part of an approved accommodation plan. Student or instructor content, digital or otherwise, created and/or used within the context of the course is to be used solely for personal study, and is not to be used or distributed for any other purpose without prior written consent from the content author(s).
Policy about course outlines can be found in the Evaluation Procedures and Grading System section of the University Calendar.
There is an alternative method for accessing your University of Alberta email account, see the following link for details.
https://www.ualberta.ca/information-services-and-technology/services/email-calendaring/index.html
