Applied Economics

GROUPS:
Grado de Economía
Doble grado de Economía-Derecho

DESCRIPTION:
This is an introductory course to applied research in Economics. Linear econometric techniques together with the required programming skills will be studied. Actual examples of influential studies will be presented, and in some cases, replicated in computer sessions.

PRE-REQUISITES AND GENERAL ASPECTS:
Students are expected to have completed an introductory course on Econometrics. It is the student's responsibility not to enroll in a group whose schedule coincides with that of another subject in which they are enrolled. NO DATE AND TIME READJUSTMENTS WILL BE ALLOWED IN THE EVALUATION TESTS DUE TO CONFLICT OF SCHEDULES OR FOR INTERNATIONAL STAYS.

SYLLABUS:

Data Management and linear regression: Linear regression model : Interpretation of parameters , basic assumptions and estimation by ordinary least squares ( OLS). Variance estimators , asymptotic properties . Model interpretation . Hypothesis testing . Use and organization of gretl databases . Gretl regression .

Models of binary dependent variables.

Instrumental Variables: Endogenous explanatory variables. Valid instruments. Tests of endogeneity and overidentifying restrictions.

Policy Evaluation. Pooled Data with repeated cross-sections. The OLS estimator as difference-in-differences estimator. Panel data. Unobservable heterogeneity. First difference estimator, fixed effects and random effects..

ORGANIZATION:
The course is spread over 14 weeks, with 2 weekly classes of 1.5h:

1 lecture (theory and also discussion of empirical papers)
1 reduced group (empirical work.)

All course materials (program, notes, and exercises) will be available at this webpage.
Software: Gretl (freeware you can download here)

TEXBOOKS:
Although the course does not follow any particular textbook, plenty of material is taken from the following books and they are a very useful reference to extend the material we see in class.

Stock, J.H. and Watson, M.M. Introduction to Econometrics, Third Edition
Angrist and Pischke, Mostly Harmless Econometrics. Princeton University Press
Goldberger, A.S. Introductory Econometrics, Harvard University Press.
Kennedy, P. A Guide to Econometrics, Blackwell Publishing.
Wooldridge, J.M. Introduction to Econometrics: A Modern Approach. PTL Press.
Joshua Angrist and Jörn-Steffen Pischke. Mastering 'Metrics. The Path from Cause to Effect. Princeton University Press. 2014

EVALUATION:

Students are supposed to read the notes and the papers included in the program, even if the material is not covered in class, solve all the exercises (even those not solved in class), and learn how to use Gretl to write their own econometric routines.

The continuous evaluation is based on three assessments. Each of these evaluations is made of a quiz and participation. Each of the quizzes cannot be taken on any dates or times other than those established at the beginning of the semester for each of the groups. Not taking one of the quizzes will mean a grade of zero in this evaluation, and not taking to two of the quizzes will mean a final grade of zero. Those students who have not taken one of the quizzes but have taken the remaining ones, in the last week of the course could take a recovery quiz to replace the grade of zero in the missing quiz. The participation grade will be implemented by each instructor with a weighting of 10% of each evaluation. Finally, the weighting of each evaluation in the continuous evaluation grade will be 25% (first evaluation), 35% (second evaluation), and 40% (third evaluation).

The recovery quiz will be schedule in the last week of the course and it will cover the material that has not been evaluated.

"Convocatoria Ordinaria" Final Grade = Continuous Evaluation

"Convocatoria Extraordinaria" Final Grade= max{Continuous Evaluation ; Final}