Lecture 1 economic questions and the data
-
Upload
carlos-mendez-guerra -
Category
Documents
-
view
1.967 -
download
2
description
Transcript of Lecture 1 economic questions and the data
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Introduction to EconometricsEconomic Questions and Data
Carlos A. Mendez Guerra
Graduate School of International DevelopmentNagoya University
August 6, 2010
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Outline
1 What is Econometrics?
2 The LAB of Social Sciences
3 The Methodology of Econometrics
4 The Structure of the Data
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Outline
1 What is Econometrics?
2 The LAB of Social Sciences
3 The Methodology of Econometrics
4 The Structure of the Data
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Outline
1 What is Econometrics?
2 The LAB of Social Sciences
3 The Methodology of Econometrics
4 The Structure of the Data
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Outline
1 What is Econometrics?
2 The LAB of Social Sciences
3 The Methodology of Econometrics
4 The Structure of the Data
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Economic Questions
Relationships and Magnitudes
Economics suggests relationships, but not quantitative magnitudesof causal effects.
What is the quantitative effect of reducing class size onstudent achievement?
How does another year of education change earnings?
What is the price elasticity of cigarettes?
What is the effect on output growth of a 1 percentage pointincrease in inflation?
What is the effect on housing prices of environmentalimprovements?
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Economic Questions
Relationships and Magnitudes
Economics suggests relationships, but not quantitative magnitudesof causal effects.
What is the quantitative effect of reducing class size onstudent achievement?
How does another year of education change earnings?
What is the price elasticity of cigarettes?
What is the effect on output growth of a 1 percentage pointincrease in inflation?
What is the effect on housing prices of environmentalimprovements?
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Economic Questions
Relationships and Magnitudes
Economics suggests relationships, but not quantitative magnitudesof causal effects.
What is the quantitative effect of reducing class size onstudent achievement?
How does another year of education change earnings?
What is the price elasticity of cigarettes?
What is the effect on output growth of a 1 percentage pointincrease in inflation?
What is the effect on housing prices of environmentalimprovements?
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Economic Questions
Relationships and Magnitudes
Economics suggests relationships, but not quantitative magnitudesof causal effects.
What is the quantitative effect of reducing class size onstudent achievement?
How does another year of education change earnings?
What is the price elasticity of cigarettes?
What is the effect on output growth of a 1 percentage pointincrease in inflation?
What is the effect on housing prices of environmentalimprovements?
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Economic Questions
Relationships and Magnitudes
Economics suggests relationships, but not quantitative magnitudesof causal effects.
What is the quantitative effect of reducing class size onstudent achievement?
How does another year of education change earnings?
What is the price elasticity of cigarettes?
What is the effect on output growth of a 1 percentage pointincrease in inflation?
What is the effect on housing prices of environmentalimprovements?
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Economic Questions
Relationships and Magnitudes
Economics suggests relationships, but not quantitative magnitudesof causal effects.
What is the quantitative effect of reducing class size onstudent achievement?
How does another year of education change earnings?
What is the price elasticity of cigarettes?
What is the effect on output growth of a 1 percentage pointincrease in inflation?
What is the effect on housing prices of environmentalimprovements?
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics
Definition
The application of statistical and mathematical methods to theanalysis of economic data, with the purpose of giving empiricalcontent to economic theories (verifying them or refuting them).
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Causal Effects and Idealized Experiments
Ideally, we would like an experiment
What would be an experiment to estimate the effect of classsize on standardized test scores?
But almost always we only have observational(nonexperimental) data.
Returns to Education, Cigarette Prices, Monetary policy
There are difficulties arising from usingobservational to estimate causal effects
1 Confounding effects (omitted factors)
2 Simultaneous causality
3 Correlation does not imply Causation (Can be difficult tostablish causality)
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Causal Effects and Idealized Experiments
Ideally, we would like an experiment
What would be an experiment to estimate the effect of classsize on standardized test scores?
But almost always we only have observational(nonexperimental) data.
Returns to Education, Cigarette Prices, Monetary policy
There are difficulties arising from usingobservational to estimate causal effects
1 Confounding effects (omitted factors)
2 Simultaneous causality
3 Correlation does not imply Causation (Can be difficult tostablish causality)
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Causal Effects and Idealized Experiments
Ideally, we would like an experiment
What would be an experiment to estimate the effect of classsize on standardized test scores?
But almost always we only have observational(nonexperimental) data.
Returns to Education, Cigarette Prices, Monetary policy
There are difficulties arising from usingobservational to estimate causal effects
1 Confounding effects (omitted factors)
2 Simultaneous causality
3 Correlation does not imply Causation (Can be difficult tostablish causality)
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Causal Effects and Idealized Experiments
Ideally, we would like an experiment
What would be an experiment to estimate the effect of classsize on standardized test scores?
But almost always we only have observational(nonexperimental) data.
Returns to Education, Cigarette Prices, Monetary policy
There are difficulties arising from usingobservational to estimate causal effects
1 Confounding effects (omitted factors)
2 Simultaneous causality
3 Correlation does not imply Causation (Can be difficult tostablish causality)
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Causal Effects and Idealized Experiments
Ideally, we would like an experiment
What would be an experiment to estimate the effect of classsize on standardized test scores?
But almost always we only have observational(nonexperimental) data.
Returns to Education, Cigarette Prices, Monetary policy
There are difficulties arising from usingobservational to estimate causal effects
1 Confounding effects (omitted factors)
2 Simultaneous causality
3 Correlation does not imply Causation (Can be difficult tostablish causality)
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Causal Effects and Idealized Experiments
Ideally, we would like an experiment
What would be an experiment to estimate the effect of classsize on standardized test scores?
But almost always we only have observational(nonexperimental) data.
Returns to Education, Cigarette Prices, Monetary policy
There are difficulties arising from usingobservational to estimate causal effects
1 Confounding effects (omitted factors)
2 Simultaneous causality
3 Correlation does not imply Causation (Can be difficult tostablish causality)
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Econometrics in 8 Steps
1 Statement of theory or hypothesis (RESEARCH QUESTION).
2 Specification of the MATHEMATICAL MODEL of the theory
3 Specification of the STATISTICAL MODEL (EconometricModel)
4 Obtaining the DATA
5 ESTIMATION of the parameters of the econometric model
6 Hypothesis TESTING
7 Forecasting or PREDICTION
8 USING the model for control or policy purposes.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Cross Sectional, Time Series and Panel Data
1 Cross Section: Multiple entities observed at a Single timeperiod.
2 Time Series: Single entity observed at Multiple time periods.
3 Longitudinal Data: Multiple entities where each entity isobserved at Multiple time periods.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Cross Sectional, Time Series and Panel Data
1 Cross Section: Multiple entities observed at a Single timeperiod.
2 Time Series: Single entity observed at Multiple time periods.
3 Longitudinal Data: Multiple entities where each entity isobserved at Multiple time periods.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Cross Sectional, Time Series and Panel Data
1 Cross Section: Multiple entities observed at a Single timeperiod.
2 Time Series: Single entity observed at Multiple time periods.
3 Longitudinal Data: Multiple entities where each entity isobserved at Multiple time periods.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
Cross Sectional, Time Series and Panel Data
1 Cross Section: Multiple entities observed at a Single timeperiod.
2 Time Series: Single entity observed at Multiple time periods.
3 Longitudinal Data: Multiple entities where each entity isobserved at Multiple time periods.
Carlos Mendez (GSID) Econometrics: Lecture 1
What is Econometrics?The LAB of Social Sciences
The Methodology of EconometricsThe Structure of the Data
THANK YOU!
Carlos Mendez (GSID) Econometrics: Lecture 1