Writing an Empirical PaperAndre R. Neveu

9/10/2008

Empirical vs. Theory “Capstone”

Bring theory to data Does theory pass the test?

Ex: Immigration causes wages to fall

Rewarding and frustrating Learn through struggling

You get to be “creative” Useful in interviews

Art is long, and time is fleeting,-Longfellow

Decisions Research question Motivation and background Literature Review Empirical Strategy

Theory Data Methodology

Write-up

Choosing a research question Examine what brought you to economics or

captivates you right now Favorite textbook (see callouts and footnotes) Pop-econ Blogs Scan journals (JSTOR/Google

Scholar/EconLit) Replication/Extension/New Data

Motivation and Background Once you have your topic

Find competing viewpoints Often found in other papers’ literature reviews Note data used by authors Note criticism!

How have others approached the topic Data types & novel data Regression method Competing theory

Make sure your topic is “approved”

Literature Review & Theory Read many abstracts and introductions

Does paper really study your idea? Ex: Great Moderation models and “Learning and

the Great Moderation” (Bullard and Singh 2008) Sometimes papers study different theories and

ideas completely, but it is very relevant to your method (Ex. “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania ” Card and Krueger 1994)

Empirical Strategy Theory Data Methodology

Theoretical Foundation Solid theoretical foundation or framework Testing a previously developed and often

previously tested theory “Tweaking” or “combining” theories Stretch assumptions Unless you have examined one theory before,

avoid comparing different theories

Data Types Tools and Methods differ

Cross-sectional Panel Time Series Limited Dependent Variables

Cross-sectional Data See Studenmund or Wooldridge intro books

Heteroskedasticity Non-linearities Multicollinearity Instrumental Variables Simultaneous Equations

Panel & Pseudo-panel Data See Wooldridge Econometric Analysis of

Cross Section and Panel Data Two or three years?

Difference-in-difference (DD) or difference-in-difference-in-difference (DDD)

Multiple years Fixed Effects Random Effects

Time Series See Walter Enders Applied Econometric Time

Series Heteroskedasticity Unit Root/Stationarity Vector Autoregression (VAR) (c-i-y) Granger Causality

Limited Dependent Variable Probit and Logit Models

Probability (01) Ordered Models

Ex. Number of doctor visits/arrests Multinomial Models

Ex. Types of contraception Truncation and Censoring

Wages of non-workers? Topcoding?

You are facing a time constraint Can you obtain the data you need? How narrow is your topic? Do you know how to use the software to

analyze your idea?

Where can you get data? dataferrett.census.gov

American Community Survey (ACS)American Housing Survey (AHS)Behavioral Risk Factor Surveillance System (BRFSS)Consumer Expenditure Survey (CES)County Business Patterns (CBP)Current Population Survey (CPS)Decennial Census of Population and Housing (Census2000)Decennial Census of Population and Housing (Census1990)Delaware StatisticsHarvard MIT Data Center Collection Home Mortgage Disclosure Act (HMDA)Maryland Statistics National Ambulatory Medical Care Survey (NAMCS)National Health and Nutrition Examination Survey (NHANES)National Health Interview Survey (NHIS)National Survey of Fishing, Hunting, and Wildlife-Associated Recreation (FHWAR)Small Area Income and Poverty Estimates (SAIPE)Social Security AdministrationSurvey of Income and Program Participation (SIPP)Survey of Program Dynamics (SPD)

Where can you get data? Bureau of Economic Analysis Bureau of Labor Statistics Resources for Economists

http://www.rfe.org/showCat.php?cat_id=2 www.freelunch.com

Now what do you do with it? Try to put your data directly into SPSS (or

your preferred software) You MUST have a “codebook” for your own

purposes Gender = 1 or 2? Race = 1, 2, 3, 4, or 5?

CLEAN your data so you can read it AND work with it Missing values? Zero hours of work?

SoftwareGUI SPSS is available campus-wide (Norusis books) EViews has affordable student options

Coding Mathematica is available campus-wide SAS may be available Matlab if you are ambitious (affordable student option) R is free (open-source and spreading) Other options are expensive and not “locally” supported

Theory should guide your data Many datasets have hundreds or thousands of

variables KNOW what you want before you dig for

data Use literature review to guide you to the right

datasets Don’t find the best regression and then justify

it with theory

Setup your Null and Alternatives You should decide what you are testing

before you begin Significant novel results are hard to obtain

“If it was so easy…” Statistical versus practical significance Direction and magnitude

Do Your Empirical Work Run your simplest regression model Add variables to your simple model Make adjustments to your model

Instrumental Variables, Fixed Effects, etc… How do you confirm statistical significance?

Do you have problems with inference? Are individual estimators significant? Are overall models significant?

Avoid “digging” or “mining”

You should NOT include an SPSS printout. Carefully organize your data and tests for inference

Excerpted from Card and Krueger (1994), Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania.

Now you can writeSuggestions Motivation and research “statement” Write literature review FIRST Helps to guide development of your theory section and frame

your position Describe data Empirical analysis Conclusion Introduction & Abstract References Title Proofread

General guidelines Newspaper or “triangular” style Brief Try to get your point across in fewer words Cite everything Assume your reader is familiar with

regression analysis Use footnotes to keep text flowing or present

tangential topics

Literature ReviewDO Note the most important contribution of all references Include more than three references Include all VERY relevant literature Refer to methodological papers Cite any ideas that are not yoursDO NOT Include every paper you looked at Reference your textbook to describe OLS Cite Wikipedia Give extensive recaps of previous work

Theoretical Section Justify your empirical work If theory is limited, try to explain in words Show your functional form

DO NOT Rehash all competing theories Write out: 22110 xbxbby

Data Provide sources on all variables Provide summary statistics on all variables in well-organized

table (usually mean, SD, and range are sufficient) Include units Read “decimal places” section Make data and analysis available for othersDO NOT Rewrite your data dictionary Split tables over several pages Report hundreds of pages of output Include straight SPSS or Excel output

Empirical Section Not a data summary Compare your results to the previous

literature Not the time to introduce a new article Be specific about previous literature’s

findings If nothing is significant, what about direction

Conclusion Restate the research question Provide your answer Restate most important results in relation to

previous literature Best areas for further research

Introduction & Abstract State the research question Motivation (short) Results Do your results conflict or support previous

literature? Abstract should really only contain your

research question and results

References and Footnotes Choose a standard style (I prefer Chicago) Include everything you reference in your

paper Don’t add references you don’t use Avoid citing textbooks (unless relevant) Use footnotes to keep text flowing, for

references, and brief discussions.

Abstract: 100-150 Words

State your findings

Introduction: Restate your findings!

Motivate your research

Not a literature review but can mention some previous work

Presenting your work Similar fashion to your final paper Tell the punchline first You are facing a time constraint Clarity and brevity Diagrams are often work, but helpful

Not a table for the middle of your paper. If you MUST include a table like this, you should add it in an appendix!

A table that is difficult to understand in your paper… is even worse in a presentation!

Peer Review Get your paper done early Give your paper to friends, teachers, or the

writing center to proofread your paper Accept criticism, improve your paper, and

move on Wait 24 hours Reread your paper and revise it