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Steps
1. Choose a topic. 2. Find a (good) question. 3. Figure out an identification strategy.
- Find your data and methodology
1. Choose a Topic
Choose the area and a specific topic
Read the newspaper, look at the course syllabus Browse journals and textbooks (EconLit)
Discuss with classmates, professors, friends, ...
1. Choose a Topic
Literature review
The question can be out there, but you may come up with a new way of approaching it. You may find a gap in the literature.
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3. Identification Strategy
How are you planning to answer your question?
a. Methodology.
b. Data
3. Identification Strategy
a. Methodology
Reduced form regression analysis Instrumental variables Structural model Matching, Propensity score estimation Non-parametric bounds Experiment (lab or natural) etc
3. Identification Strategy
a. Methodology It will depend on the specific question, the data available, and your own strengths!
Be very aware of (and honest about) the assumptions that are driving identification.
Functional form, independence,
3. Identification Strategy
b. Data Household surveys.
US: CPS, NLSY, PSID (Census, SIPP, NELS, etc). Europe: ECHP, national employment and consumption surveys, BHP, GSOEP. Canada: Survey of Household Spending, Labor Force Survey, Census, etc.
Aggregate data.
Penn World Tables, World Bank, OECD, etc.
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3. Identification Strategy
Before starting with the estimation be aware of the type of data:
Cross-section Census Time series Panel
3. Identification Strategy
GET TO KNOW YOUR DATA Read manual and codebook. Become familiar with the structure of the data set
identifiers, household vs. individual variables
Identify the variables of interest What are important controls Run a lot of descriptive statistics. Get to know your variables (which currency, missing values, etc.) and detect mistakes
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4. Econometric estimation
Main specification
What are your assumptions and are the reasonable? What are your sources of identification? Identify possible problems, caveats, alternative explanations
6. Conclusion.
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describe your sample: descriptive statistics of main variables - evtl. by comparions groups, subsets, etc.
Variable wage university age married child Obs 2708 2708 2708 2708 2708 Mean 3.269529 .0705318 40.7031 .5029542 .6458641 Std. Dev. .4671046 .2560884 10.98031 .5000836 .9753867 Min .2850343 0 16 0 0 Max 5.60919 1 81 1 4
discuss how variables are constructed, measurement problems, missing control variables, etc.
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Summarize shortly the paper Discuss your results with potential interpretation Policy conclusion
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IMPORTANT
set personal deadlines
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Bibliography
Wooldridge (Introductory Econometrics). Chapter 19. Carrying out an Empirical Project
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