This quarter will be devoted to giving you practical experience in
doing applied econometric work.  All stages will be covered, from model
building to estimation and interpretation.  I must warn you that this
is a very demanding course requiring a great deal of effort on your
part but, if your heart and soul is in it, it will also be very
rewarding, especially in the job market.
 
For the first three weeks, I will cover the materials that were not
covered in 120C.  You will have computer assignments on these topics. 
Thereafter we will meet individually in my office.
 
There will be no written final exam, but instead, an independent
project is required (no teams are allowed).  You will choose your own
empirical problem in economics, with some help from me and other
professors, collect the relevant data, estimate appropriate models
using necessary techniques, perform diagnostic testing, and write a
report describing all the stages of the empirical work.  I want to
emphasize that the topic should have relevance to economics and the
models you formulate should be based on economic theory and behavior. 
Thus, a project relating horse race finish times to the characteristics
of a horse or one on baseball/football salaries is not acceptable.

The text book for this course is my INTRODUCTORY ECONOMETRICS WITH
APPLICATIONS, fourth edition.  We will be covering materials from
Chapters 10 through 14 of my book.  Chapter 14 is indispensable for
your empirical project.  The remaining chapters would be useful
references for 120C material.

The calendar and deadlines for the various tasks are as follows:

Weeks 1 through 3:  
First read Section 14.1 of the book that describes how to go about
choosing a topic for study.  Next read Section 14.2 on carrying out a
literature review on the selected area.  Then formulate a general model
(see Section 14.3) and check data sources (Section 14.4) to see if the
project is viable.  [You need not have collected the data; that will
take quite some time.] Be sure to clear the topic with me in the
first two weeks because I may be able to suggest data sources and/or
point out pitfalls in the topic.

Week 4:  
Prepare a 10-12 page project proposal that must contain the following
items.  Deadline for the proposal is THURSDAY OF THE FOURTH WEEK
(no late papers).

(a)  Project title and a statement of the problem you are studying.

(b)  A brief literature review (3 to 4 pages each) of the papers and/or
books you have read that are related (in some cases perhaps indirectly)
to the problem under study (minimum four required).

(c)  A list of variables clearly defined.  Identify the dependent
variable and also indicate whether you will use time series or cross
section data.  If your model involves simultaneous equations, write
down a complete model.

(d)  For each independent variable, a short paragraph explaining why you
believe it has a causal effect on the dependent variable.  [See
application Section 4.7 for an example.]
 
Weeks 5 through 7:
Collect the data for the project (Section 14.4) and enter them on the
computer.  Test them for accuracy by printing them back.  Transform
variables appropriately, compute summary statistics and correlation
coefficients (which can identify multicollinearity).  Submit a complete
list of data sources along with a printout of the data.  (see Appendex D
and the header files for the data in the book for examples for time
series and cross section data.)

Deadline for the listing of data and summary statistics is THURSDAY OF
THE SEVENTH WEEK.

Weeks 8 and 9:
Carry out the empirical analysis (Section 14.5).  This requires you to
estimate alternative models and perform necessary tests of hypotheses
(nonlinearity, autocorrelation, heteroscedasticity, etc.).  Bring me
your intermediate outputs so that I can guide you in the rest of the
analysis.

Week 10:
Write the final report.  The final report must be completely
self-contained (that is, it should include revised versions of what you
submitted earlier) and must conform to the outline given in Section
14.5 of the book.  Points will be taken off if it does not.  You
are also required to submit the data collected for the project
(original data, a header file, and another file listing the
transformations) on a floppy disk.

The final report is due at the time of the final exam (that is, no
later than 2:30pm, Monday, June 7, 1999), but you are strongly encouraged
to submit it by the THURSDAY of the tenth week so that you can study for
other finals.  The final report will determine your entire grade.

Start your data gathering and model estimations early.  As you know,
towards the end of the quarter, computer terminals are hard to come by
and will slow your empirical work considerably.  Incompletes are not
feasible because I cannot get you a computer account to finish the
work.