Economics 312

Spring 2011
Econometric Project #3

Due 6am, Tuesday, March 1

Hill, Griffiths, and Lim, Problems 5.13 and 5.19

This project involves doing two of HGL's applied problems from Chapter 5. As always, you will work in teams of two students each, as assigned below.

For this assignment, your report should be in two separate parts, one for each of the problems. Don't forget that each part/problem should have an introduction defining the data and the problem and a conclusion summarizing results and assessing internal and external validity.

Problem 5.13 will be your first opportunity to explore "hedonic models" in which selling prices (often, as here, of houses) are related to the characteristics of the product being sold. (The sample report that I prepared deals with a hedonic model, but with a different dataset.) This problem examines several alternative functional forms and asks you to perform various estimations and tests using a quadratic model of two explanatory variables.

Problem 5.19 returns to the wage/education relationship with which you worked in Problem 2.15 of Project #1 and Problem 4.14 of Project #2. We are now equipped with tools of multiple regression, which allow us to include multiple independent variables in the regression to reduce the omitted-variables problem. Here we examine experience and hours of work as well as education in the determination of earnings.

Links to Datasets

Problem 5.13: br2.dta br2.def
Problem 5.19: 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.