Economics 312

Spring 2011
Econometric Project #2

Due 6am, Tuesday, February 22

Hill, Griffiths, and Lim, Problems 3.7, 3.10, and 4.14

This project involves doing three of HGL's applied problems from Chapters 3 and 4. As always, you will work in teams of two students each, as assigned below.

For this assignment, your report should be in three separate parts, one for each of the problems.

Chapters 3 and 4 of Adkins and Hill's Using Stata for Principles of Econometrics will give you more details on the Stata procedures needed to perform the computations in this project.

Problem 3.7 builds on the work you did last week on the capital-asset pricing model in Problem 2.10. The Chapter 2 exercise was incomplete because we had not (at that time) studied statistical inference in the simple regression model. This exercise adds some relevant hypothesis tests to the point-estimation tasks you did in 2.10. (Note that the corrected data set is linked below. Use this one even if you used the flawed one for Project #1.)

Problem 3.10 explores an important dataset on the economics of education. These data are from Project Star, which was a controlled experiment conducted in Tennessee grade schools to examine the effects of class size and staffing on student achievement.

Problem 4.14 revisits the wage equation that we examined last week in Problem 2.15. It considers questions of functional form in the simple-regression context.

Links to Datasets

Problem 3.7: corrected capm4.dta corrected capm4.def
Problem 3.10: star.dta star.def
Problem 4.14: cps4_small.dta cps4_small.def

Project Teams

Project teams for the assignment are below, with partners for this assignment shown in the rows of the table.