Spring 2011
Final Exam Questions
Due by electronic submission: Noon, Thursday, May 19
Instructions
1. This part of the exam is open-book; you may use whatever outside materials you wish. However, you may not communicate with anyone except the instructor about the exam.
2. The exam is due electronically at noon on Thursday, May 19. There is no specific time limit, but you should not need to spend more than a few hours on it.
3. You are responsible for making sure that you understand each question clearly. In case of any ambiguity, be sure to consult the instructor.
4. When you discuss the estimated effects of one variable on another, but sure to consider both statistical significance and economic significance.
5. If you use Stata commands/options or statistical methods that have not been discussed in class, you should briefly describe what the command/test/method does and justify why it is appropriate to use. You should supplement your answers with supporting Stata output when it is useful.
Question #1: Review of unpublished paper
Read the paper "Video Games and Crime" by Michael Ward. Suppose that you have been asked by the editor of a journal to review this paper for publication. Prepare a 1-2 page review of the econometric analysis in the paper. You should consider whether the analysis is appropriate for answering the question the authors pose, issues of internal and external validity arising from the analysis, and ultimately whether you find the authors' answer convincing.
Question #2: Allocation of Time to Extramarital Affairs
In a novel exercise applying the economic theory of time allocation, Ray Fair developed and estimated a model of the amount of time devoted to extramarital affairs. The theoretical and data sections of Fair's paper are available at the link. Although the original paper is available, do not read the remainder of the paper, at least until after you have submitted your exam. There are several alternative methods that could be used to analyze this problem and I don't want you to be biased toward the one that Fair chose, which may or may not be the best.
One of Fair's two datasets is in the data file affairs.dta. You are to use these data to perform statistical analyses of the propensity to have affairs, using OLS and whatever alternative estimators you think are appropriate, then write up the results as though you were writing the remainder of Fair's paper. This should include four sections:
- A complete description of the statistical analysis. Explain the regressions that you performed and why you chose these particular methods.
- A description of your regression results. Your description should include both verbal explanation (emphasizing what is important) and appropriately formatted tables.
- A discussion of the implied effects of each explanatory variable on the dependent variable(s). Regression results are often difficult to grasp, even for sophisticated readers. To illustrate your results, you are to include an analysis showing the predicted outcome for an individual with particular characteristics (values of the explanatory variables) of your choosing. Depending on your method, the predicted outcome could be one or more of: the probability of having an affair, the number of affairs, the probability that the number of affairs is in various ranges, etc. Then use your estimated model to explain how a change in each of the explanatory variables would affect this outcome (e.g., an increase in age from 30 to 40, ceteris paribus, would increase the probability of having an affair by 10 percentage points). These changes and their effects should be explained in simple language that someone with no economics or mathematics background would understand.
- Conclusion. The concluding section should summarize the results of the work and what is important about them.
The sections of Fair's paper that cover these points total a little over 3 journal pages, but he does not present as much analysis as you will on item 3 above. Yours should probably be 3-5 including tables. As always, I'd like the Stata outputs you used in an appendix (or a separate file) so that I can see exactly what you did and replicate your results if necessary.