Economics 1123

Introduction to Econometrics
Fall 2015

The statistical analysis of economic (and related) data

Faculty: Prof. James Stock

Littauer Center M27
Teaching fellows: John Coglianese (Head TF)
He Yang
Daniel Lewis
Peter Tu
Prof. Stocks OH: & by appt, schedule with
Gia Petrakis (gpetrakis@fas.harvard.edu)

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Administrative matters:
Syllabus on Web site

Ec1123 (spring, fall) or Ec1126 (spring)?

Prerequisites and level:

o Stat 104 or equivalent (2 weeks of overlap with Stat 104)
o No economics prereq (but SA 10 helps)
o Math: algebra, some calculus in class, not PSs or exams

Slides posted on Web site by 9pm evening before lecture

Textbook: Introduction to Econometrics by Stock and Watson,

3rd edition (all English editions OK)

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Administrative ctd: Grading (see syllabus)
Problem sets:
o distribution method: posted on course Web site (Canvas)
o Late PS policy: full (by deadline)/half (after deadline)/zero
(after solutions are posted)
o Electronic/hard copy submission - TBD
o Answers posted after the class after the PS is due (if due on
Tuesday, posted after class Thursday)
o OK to work in groups on PSs (good idea): 3 max, write up
individually
o Total PS grade: Drop lowest of 1-7, 9, 10; 8 counts double
and cant be dropped.
Course grade:
o Problem Sets: 30%; Midterm: 25%; Final: 45%.
o Ec 1123 fall & spring use same curve
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Administrative ctd:
Sections
o online sectioning (Canvas)
o Stats & STATA review session Friday 9/4 (Peter)
o Regular sections start next week (next Thursday-Sunday).
o TODAY Fall athletes please email scheduling input to
John

STATA
o Problem sets require STATA
o STATA is a means to an end, not an end in itself
o Intro to STATA handout is on the course Web site
o Use .do files, get started now before PSs get harder
o STATA .do files will be included with lecture notes

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 Three Regression Studies

A. Doping and athletic performance

Matthew Romanczuk, Baseballs Juiced Era: Steroids, Swinging

for the Fences, or Both? (Harvard UG Thesis, 2009)

Data:
MLB players and at-bat data, 1965-2008
6,723,291 at bats (data on outcome, park, conditions,
home/away, player, etc.)

Key dates: Juiced era is 1994-2006

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 HR per AB by Year
.035
.03
HR per AB

.025
.02
.015

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Year

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 K per AB by Year

.2
.18
K per AB

.16
.14

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Year

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B. What has happened to labor force participation since 2000?

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Source: Council of Economic Advisers, The Labor Force
Participation Rate Since 2007: Causes and Implications, at
http://www.whitehouse.gov/sites/default/files/docs/labor_force_par
ticipation_report.pdf
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C. Economic Cost of Climate Change

Surveys of economic literature on cost of climate change:

Dell, Melissa, Benjamin F. Jones, Benjamin A. Olken. 2013.
What Do We Learn from the Weather? The New Climate-
Economy Literature. Journal of Economic Literature,
forthcoming.
CEA (2014), The Cost of Delaying Action on Climate Change,
http://www.whitehouse.gov/sites/default/files/docs/the_cost_of
_delaying_action_to_stem_climate_change.pdf

Risky Business report:

Main report: http://riskybusiness.org/
Backup material: http://rhg.com/reports/climate-prospectus

Slides from Risky Business

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 Statistics Review:
Key Concepts and Procedures

Distributions and conditional distributions

Expectations and conditional expectations
Random sampling as the source of sampling uncertainty
Central Limit Theorem
Learning about population distributions from data:
1.Estimation
2.Confidence intervals
3.Hypothesis testing
Application to comparison of two means

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