We will finish our discussion of the
during Sunday's session (01 Oct) and Tuesday's session (03 Oct).
Then during the next sessions (on Sun 08 Oct and Tue 10 Oct),
we will discuss
For theoretical background on hypothesis testing,
please read Kennedy chap. 4.
Please also read either Stock-Watson chaps. 5 and 7
or equivalent chapters in a better textbook.
Two alternatives that you might consider are the
Hill, Griffiths and Lim
textbook and the
During our next class sessions -- on Sun 24 Sept and Tue 26 Sept -- we will
continue our discussion of the problem set
with problems #2 and #3, which are designed to help you understand
maximum likelihood and
For background on those topics, please read Kennedy chaps. 1-4.
(posted: 21 Sept 2017)
It is important for students to purchase copies of both textbooks
and read them both. In practice, it is easy to convince students to
read the Kennedy textbook, but it is difficult to convince students to read
the Stock-Watson textbook.
So maybe we should replace the Stock-Watson textbook?
If you're interested in exploring some alternatives,
check out the one by
Hill, Griffiths and Lim and its Gretl companion by
Lee Adkins (PDF).
Or check out the
And as you search for alternatives, compare reviews.
Readers give better reviews to the Hill-Griffiths-Lim textbook
and the Studenmund textbook than they do to the
Finally, please share your thoughts on these textbooks with me,
so that I can design a better course. Thank you!
Problem Set and Reading
(updated: 06 Sept 2017)
On Tuesday (05 Sept), I introduced the
I will introduce it to the Sunday group when we next meet (10 Sept).
The problem set will help you understand the material in chaps. 1-5
in the Stock-Watson textbook. So please read those chapters and
please work on the problem set.
The combined data is available as a
I have also made available the
that I wrote to analyze the combined data.
While examining the data, I noticed that 9 of the 11 states that joined the Confederacy had the
lowest minimum wage rates in the country (and the other two weren't much higher), so I grouped the
states by Civil War status and obtained the following weighted averages for the period 2001-2016:
state minimum wage
average annual pay
To be fair, some Free States do have a low minimum wage rate,
but all of the Confederate States have low minimum wage rates.
The Free States also tend to have higher employment rates than
the Confederate States.
And overall, states that have higher minimum wage rates
tend to have higher employment rates.
(posted: 29 August 2017)
As a follow-up to Sunday's session and a preview of Tuesday's session,
I would like to continue our discussion of
statistics and probability and then
introduce ordinary least squares.
To prepare for those sessions, please read chaps. 1-5 in the
Stock-Watson textbook. And please take first look at the
Welcome to the course website. This site helps me organize the course.
I hope you find it helpful.
I have posted a copy of the
Please review it and please look at the notes and course materials
that I have posted below. I have also prepared a
problem set for you.
We will discuss the solutions to these problems in class.
Please acquire a copy of the
Stock and Watson textbook and the
Kennedy textbook as soon as possible.
To begin the course, I would like to start with a review of
statistics and probability, so please read
chaps. 1, 2 and 3 in the Stock and Watson textbook
before our next class session. To refresh your memory of statistics,
you may want to look at my
You must do econometrics to learn econometrics. A textbook is
helpful, but not sufficient. To learn econometrics, you must
actively explore a dataset.
The best dataset to give you is the dataset that I am most
passionate about. I want to know how employment protections affect
the employment opportunities available to workers.
This is a personal issue for me, but it's also an issue that affects
you, your family and your friends, so together let's explore the data
and find out how labor law shapes the career opportunities available
So as a starting point for discussion and as an introduction to
econometrics, please read my
"Analysis of the 'Biagi Law.'"
It tests an important null hypothesis and the dataset that the paper
explores is one of the datasets that we will explore together this
Then to place the discussion in an American context, please read
John Schmitt's (2013) paper on why the
minimum wage has no discernible effect on employment.
Having identified an avenue of inquiry, we must place it in a
theoretical context to, so please read the
wikipedia article on the minimum wage
and please study my "minimum wage
and the monopsonist" problem.
With theory and data in hand, we will then test the null hypothesis
that the minimum wage does not have a significant effect on
To conduct a statistical analysis (like the one just described),
you will need to install a few (open source)
statistical and mathematical software programs on your computer.
is a great statistical software package for learning econometrics.
It has an simple interface and ships with sample datasets.
It's a great learning tool and I highly recommend it.
As you get better at data analysis, you will want a
more flexible tool. I use the
which (as the name suggests) is a programming language.
For mathematics, I use
which provides a graphical interface to
a computer algebra system that specializes in symbolic operations
(as opposed to numerical computing).
Over the course of the semester, I will provide datasets for you
to work with in Gretl. I will avoid asking you to write your own
computer code, but to push you in the right direction,
I will provide R scripts and wxMaxima notebooks for you to review
(and tinker with).
take your time
Finally, please remember that we will cover these topics
over the course of the semester. So please begin reading,
but please do not rush through the reading. Take the time
to understand what you are reading. And enjoy it because
econometrics is a lot of fun.
I'm looking forward to working with you this semester.