UNIVERSITY OF ALBERTA

Department of Economics
ECON 599-B1
Applied Econometrics
Winter 2015 ____ D.Young
Lecture: T/R 1100 - 1220 (CAB 269) Office Hours: By appointment
Phone : 492-7626 e-mail: [email protected]
Course webpage: https://sites.google.com/a/ualberta.ca/denise-young/teaching/econ599
(e-mail must be sent from your U of A account and must include ECON 599 in the subject line.)

Course Description : Theory and application of methods of estimation and inference in single
equation and simultaneous equation models for economists. The main emphasis will be on
microeconometric applications using cross-sectional and panel data. Most of these techniques
can also be applied to macroeconomic questions. A basic understanding of the underlying
econometric theory required for the selection and application of appropriate techniques to the
economic problem being considered will be emphasized.

Prerequisite: ECON 598 or equivalent. Prerequisites will be enforced. Students without

appropriate prerequisite preparation will not be allowed to remain registered in the course.

Evaluation: Assignments (2) --- 10 %

Term Paper proposal (February 24) --- 0%
Mid-term test (March 3) --- 20 %
Term Paper presentation (late March / early April) --- 5%
Term Paper (April 9 in class) --- 30 %
Final Exam (April 17 0900-1100) --- 35 %
Notes:
(i) Assignments will be posted on the course website at least 2 weeks before their due dates. Late
assignments will not be accepted.
(ii) If the mid-term test is missed for a compelling reason (and the appropriate forms are
submitted within two days of the mid-term date), a deferred midterm must be written on March 6
at 10 am). The weight of the mid-term will not be shifted to the final exam under any
circumstances.
(iii) Practice questions from previous mid-terms and finals will be posted on the course website
at least 2 weeks ahead of the relevant examination date.
(iv) The term paper must be completed in order to pass the course. The term paper proposal is
also required. If a proposal has not submitted and approved, the paper will not be graded.
(v) Two copies of the term paper must be submitted: (1) a printed hard copy; and (2) an
electronic copy (Word or PDF). Copies of the data, command and output files used must be
submitted via e-mail or on a USB stick. A signed Academic Integrity Checklist (available on the
course web page) must be submitted along with the printed copy of the paper.
(vi) A late penalty will be applied to term papers handed in after 11 am on the due date.
Penalty = [number of days (or part thereof) late] 2 marks out of 100. (A paper submitted by 11
am on April 12 would incur a late penalty of 9 marks)

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Term Paper:
Any topic in the area of applied economics that uses advanced techniques applicable to cross-
sectional or panel data covered in this course may be selected. Papers focusing primarily on time
series techniques will not be accepted for this course. Optional Friday term paper preparation
sessions will be held throughout the term at approximately four week intervals. Times, topics and
locations to be announced. Further details regarding the term paper are available on the course
web page.

Final Grade:
Grading
In Graduate Courses
Descriptor Letter Grade Point Value
A+ 4.0
Excellent A 4.0
A- 3.7
B+ 3.3
Good B 3.0
Satisfactory B- 2.7
C+ 2.3
C 2.0
Failure C- 1.7
D+ 1.3
D 1.0
F 0

Final course grades are determined according to the University calendar §23.4:
Grades reflect judgments of student achievement made by instructors. These judgments are
based on a combination of absolute achievement and relative performance in a class.

Required Textbook
Greene, W. (2011) Econometric Analysis, 7th ed, Prentice Hall.

Additional Readings (available for free as an electronic text via U of A Library)

Hall, A. (2005) Generalized Method of Moments, Oxford University Press.

Software:
Portions of the assignments will involve the use of at least two of Limdep, Shazam, Stata and
TSP. The software packages are available via the Virtual Computing Lab and (for students
registered in a graduate program in the Department of Economics) in the 9th floor lab. Limdep
reference manuals are available (on reserve) at the Business library. TSP manuals are available
online. Students enrolled in Economics graduate programs can also borrow Limdep, Shazam,
Stata and TSP manuals from the General Office

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Course Topics:
Topics may be covered in a different order than listed below, and some topics may be omitted.

(1) Generalized Method of Moments (GMM).

Greene: 8, 13
Hall: 1-5

(2) Panel Data: Fixed and Random Effects; Dynamic Panels.

Greene: 11, 13

(3) Stochastic Frontier Models

Greene: 12, 14, 19

(4) Discrete Choice and Count Data

Greene: 17, 18

(5) Survival / Duration Data

Greene: 19

(6) Censored Regression (Tobit) Models

Greene: 19

(7) Sample Selection Problems (Heckman and ML approaches).

Greene: 19

(8) The Bayesian Approach to Econometrics*

Greene: 16

(9) Other topics. If there is a specific (non-time series) topic that is not covered under one of the general
areas listed above and that you would like to have covered in class, please let me know.

Additional Resources for various topics may be posted from time to time on the course web
page.

* Note that this topic, if covered at all, will be covered towards the end of the course. Also, the
software used in the course is not generally amenable to Bayesian estimation, so it is not
advisable to select a Bayesian approach for your term paper.

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Additional Notes:
“Policy about course outlines can be found in Section 23.4(2) of the University Calendar.”

Academic Integrity
“The University of Alberta is committed to the highest standards of academic integrity and
honesty. Students are expected to be familiar with these standards regarding academic honesty and to
uphold the policies of the University in this respect. Students are particularly urged to familiarize
themselves with the provisions of the Code of Student Behaviour (online at
http://www.governance.ualberta.ca/en/CodesofConductandResidenceCommunityStandards/Cod
eofStudentBehaviour.aspx ) and avoid any behaviour that could potentially result in suspicions of
cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty
is a serious offence and can result in suspension or expulsion from the University.”

Learning and working environment

The Faculty of Arts is committed to ensuring that all students, faculty and staff are able to work and
study in an environment that is safe and free from discrimination and harassment. It does not tolerate
behaviour that undermines that environment. The department urges anyone who feels that this policy is
being violated to:
• Discuss the matter with the person whose behaviour is causing concern; or
• If that discussion is unsatisfactory, or there is concern that direct discussion is inappropriate or
threatening, discuss it with the Chair of the Department.
For additional advice or assistance regarding this policy you may contact the student ombudservice:
(http://www.ombudservice.ualberta.ca/ ). Information about the University of Alberta
Discrimination and Harassment Policy and Procedures is described in UAPPOL:
https://policiesonline.ualberta.ca/PoliciesProcedures/Pages/DispPol.aspx?PID=110 .

Academic Honesty:
All students should consult the information provided by the Office of Judicial Affairs regarding
avoiding cheating and plagiarism in particular and academic dishonesty in general (see the Academic
Integrity Undergraduate Handbook and Information for Students). If in doubt about what is
permitted in this class, ask the instructor.
An instructor who is convinced that a student has handed in work that he or she could not possibly
reproduce without outside assistance is obliged, out of consideration of fairness to other students, to
report the case to the Associate Dean of the Faculty. See the Academic Discipline Process .

Recording of Lectures:
Audio or video recording of lectures or labs is allowed only with the prior written consent of the
instructor or as a part of an approved accommodation plan. Recorded material is to be used solely for
personal study, and is not to be used or distributed for any other purpose without prior written consent
from the instructor.

Specialized Support & Disability Services:

If you have special needs that could affect your performance in this class, please let me know
during the first week of the term so that appropriate arrangements can be made. If you are not
already registered with Specialized Support & Disability Services, contact their office
immediately ( 2-800 SUB; Email [email protected]; Email; phone 780-492-3381; WEB
www.ssds.ualberta.ca )

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Attendance, Absences, and Missed Grade Components:
Regular attendance is essential for optimal performance in any course. In cases of potentially
excusable absences due to illness or domestic affliction, notify your instructor by e-mail within
two days. Regarding absences that may be excusable and procedures for addressing course
components missed as a result, consult sections 23.3(1) and 23.5.6 of the University Calendar.
Be aware that unexcused absences will result in total loss of the grade for any assignments that
are not handed-in or completed as a result.

Excerpts from the University of Alberta Code of Student Behaviour

30.3.2 Inappropriate Academic Behaviour

30.3.2(1) Plagiarism No Student shall submit the words, ideas, images or data of
another person as the Student’s own in any academic writing, essay, thesis, project,
assignment, presentation or poster in a course or program of study.

30.3.2(2) Cheating
30.3.2(2) a No Student shall in the course of an examination or other similar
activity, obtain or attempt to obtain information from another Student or other unauthorized
source, give or attempt to give information to another Student, or use, attempt to use or
possess for the purposes of use any unauthorized material.
30.3.2(2) b No Student shall represent or attempt to represent him or herself as
another or have or attempt to have himself or herself represented by another in the taking
of an examination, preparation of a paper or other similar activity. See also
misrepresentation in 30.3.6 (4).
30.3.2(2)c No student shall represent another's substantial editorial or
compositional assistance on an assignment as the Student's own work.
30.3.2(2) d No Student shall submit in any course or program of study, without
the written approval of the course Instructor, all or a substantial portion of any academic
writing, essay, thesis, research report, project, assignment, presentation or poster for which
credit has previously been obtained by the Student or which has been or is being submitted
by the Student in another course or program of study in the University or elsewhere.
30.3.2(2) e No Student shall submit in any course or program of study any
academic writing, essay, thesis, report, project, assignment, presentation or poster
containing a statement of fact known by the Student to be false or a reference to a source
the Student knows to contain fabricated claims (unless acknowledged by the Student), or a
fabricated reference to a source.

For further information regarding plagiarism and cheating please refer to the A
GUIDE TO ACADEMIC INTEGRITY FOR GRADUATE STUDENTS:
http://www.tie.ualberta.ca/~/media/tie/Documents/AI_Grad_Guide.pdf

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