Economics 104 Professor Lori Kletzer Spring 2008 439 Engineering 2 Bldg. version of 4/2/08 Is There Truth in Numbers? This course is devoted to empirical analysis. Think of it as a laboratory course, using real data and econometric software to test hypotheses and explore relationships. I will lead most of our discussions, with the expectation that all students will participate extensively. Most of your work will be done in the computer lab, using data available from the course website and the STATA econometric software package. Our thinking in the course will rely heavily on material covered in 100A, 100B and 113. You will complete three short papers over the quarter and one longer independent research paper. There will be no exams. Your final grade will be determined as: Final research paper 30% Three short papers 60% Class participation 10% If you still own the textbook from 113, you will find it useful as a reference. There are three readers for the course. The first, volume 1, is a reader of statistics and econometrics to serve as a refresher on econometric theory and technique, developed by Professor Wittman. It is useful as an alternative to a textbook. A book of readings/articles is required and also available at the bookstore. The third reader volume is a set of classnotes, detailed discussions of the various data sets written by Professor Wittman. The first 3-4 meetings will be devoted to reviewing basic econometric theory and technique and becoming familiar with the STATA program. Our review will focus on real applications of the Ordinary Least Squares (OLS) technique you learned in 113, along with a discussion of descriptive statistics. As the course proceeds, we will examine particular topics of interest, reviewing the theory and econometric issues, reading sample articles, and then using established data sets to test those theories or devise new ones. Course website The most up-to-date information about the course is available at: http://people.ucsc.edu/~lkletzer/econ104/index_econ104.htmlMost importantly, the data sets we’ll be using are available at this site. Contact information My office hours are Mondays and Wednesdays, 10-11am, or by appointment. My office phone is 459-3596; my email is [email protected]. 1Jinzhuo Zhao (“JZ”) will be available for consultation in the Social Sciences 1 Computing Lab (room 135) on: Tuesdays: 3-5pm office hour + lab Wednesday: 11am-1pm lab + office hour Computer access The Soc Sci 1 lab is reserved for our use on: Mondays, 10:00-11:00am Tuesdays, 4:00-5:00pm Wednesdays, 11:00am-12:00pm STATA 8.0 is currently installed with a maximum of 20 concurrent user licenses. To run the program after logon do the following: 1) Double-click on the "Applications" folder on the desktop (or from the Start Menu) 2) Double-click on the "Class Folders" folder 3) Double-click on "Economics" folder 4) Double-click on "Stata" icon The program is run from the server, however the server is read-only. So any data files created by users will need to be saved to the local hard disk's Desktop, or in the user's UCSC Home Directory which is mapped as "X:" on the PCs, or USB Flash Drive, or CD-R/RW. We have also made this software available on our Windows Virtual Lab. Our Virtual Lab is a trial service that IC is investigating. It allows students and faculty the ability to remotely connect to a Windows desktop and run applications. It requires the installation of a simple client and an internet connection (broadband is preferred, but not required). This allows students and faculty to run class applications from home, from their dorm room, over CruzNet, or anywhere they have computing resources and an internet connection. For more information, including client downloads, please see http://ic.ucsc.edu/services/virtual_computer_labs/ Our work will proceed according to the following schedule: 2COURSE OUTLINE Date(s) Topic Reference/Theory Reading Assignment April 1, 3 Introduction & review of descriptive statistics, OLS & STATA Wooldridge, ch. 1 & 2; Wittman, pgs. 3-45 April 8, 10 Determination of basketball player salaries Linear regression; dummy variables Kahn & Sherer article; Kahn article; Wooldridge, ch. 19 April 15, 17 OLS review More OLS Wooldridge, ch. 3 & 4, 7 1st paper outline due April 22, 24 CEO salaries Functional form Jensen & Murphy article 1st paper due April 29, May 1 Earnings determination/discrimination Multicollinearity Lang, ch. 11 & 14; Wittman, pgs. 46-74 2nd paper outline due May 6, 8 Economic Growth Autocorrelation Barro article; Clark article 2nd paper due May 13, 15 Deficits Boskin article 3rd paper outline due May 20, 22 Olympic Medals Bernard & Busse articles 3rd paper due May 27, 29 Political parties Models of qualitative choice Alesina & Sachs article; Wittman, pgs. 198-201; Wooldridge, ch. 17 Final paper outline due June 3, 5 Discussion of papers Final paper due June 10, 5pm Bold designates article in Readings volume