Applied Econometrics (7104)

The primary purpose of this course is to enable students to apply statistical tools in analyzing real datasets. In doing this, students would be exposed to various problems encountered in estimation and inference from models that are typically of interest to economists. Besides doing hands-on applied work, we would study econometric theory to help us understand what can go wrong with the desired properties of our estimators when certain assumptions underlying standard OLS analysis fail. Special effort would be made over the course of time to emphasize the links between regression theory done in the econometrics courses and the probability and statistics that students learn in their core math sequence. It is hoped that by doing this students will be able to better appreciate the position of linear regression theory within the broader paradigm of statistical inference and to view these disciplines as closely linked rather than disparate bodies of knowledge. Thus, the course has two equally important components: learning econometric theory and discussing issues in empirical work, both geared towards allowing students to be able to meaningfully handle and analyze data.

Course Pre-requisites:

It is expected that all students will have taken principles of economics courses covering microeconomics and macroeconomics, introductory statistics, and calculus classes.

Course Learning Outcomes:

Upon successful completion of this unit, students will be able to:

1. Construct, test, and analyse econometric models, using variables and relationships commonly found in studies of economic theory;

2. Collect, organise, and analyse economic data, and interpret results from statistical analyses;

3. Identify the desirable properties of estimators;

4. Identify key classical assumptions in the field of econometrics, explain their significance, and describe the effects that violations of the classical assumptions can have;

5. Use the least-squares method in evaluating the relationship of one explanatory variable to the dependent variable and the relationships of multiple explanatory variables to the dependent variable

Recommended Books:

Dougherty, C. Introductory Econometrics-4th Edition (2008). Oxford University Press
Gujrati, D.N. - Basic Econometrics – 4th Edition (2003)- McGraw Hill Company.
Koutsoyiannis, A.- Theory of Econometrics - 2nd Edition (1977) - McMillan.

Description of the System of Evaluation (Exam, assignments etc.):

Mid Term: 30 marks

Sessional: 20 marks