Economics 312

Spring 2012

Econometric Project #2

Due 6am, Valentine's Day

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.

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 invites you to examine the wage equation that was more briefly explored (using the same data set) in last Friday's daily assignment. It considers questions of functional form in the simple-regression context. You will need to use the material in HGL's Sections 4.5.3 and 4.5.4 in this problem.

Links to Datasets

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

Project Teams