Learning by Doing: Econometric Theory with Walk-through, Practical Applications

Introductory Econometrics with Applications, Fifth Edition, by Ramu Ramanathan, provides the perfect blend between econometric theory and hands-on practical training for a B.A., M.A., or M.B.A. course on econometrics that does not use matrix algebra.

The book is self-contained, with background information on mathematics, probability, and statistics, covered in Chapter 2 and later chapters so that students need not refer to their old notes or textbooks.

Practical applications are emphasized without sacrificing theoretical underpinnings. Numerous real-world examples walk the students through model specification, estimation, and hypothesis testing, using a logical step-by-step approach. Instead of showing only final polished results, the book shows intermediate failures and unexpected results, along with suggestions about how model specification and estimation can be improved by using diagnostic testing.

Annotated computer outputs are included in the text so that students can see exactly how econometric techniques are implemented in practice.

An entire chapter is devoted to the various steps involved in carrying out an empirical research project, namely, selection of a topic, literature review, model formulation, data gathering, estimation, hypothesis testing, and report writing. Because an empirical study is time-consuming and a student need not wait to read the whole book to start the project, suggestions are given in selected chapters so that the process is smooth and orderly and does not cause unnecessary delays.

94 data sets on real-world topics are available in the disk accompanying the text as well as on the Web page set up for the book. The data are in ASCII, B34S, EVIEWS, EXCEL, GRETL, PcGive, and SHAZAM formats so that a user can access them easily from a variety of well-known regression programs to reproduce the examples in the book and to carry out additional analyses.

Professor Allin Cottrell of Wake Forest University has graciously agreed to include a free open-source econometrics software package, GRETL (Gnu Regression, Econometric, and Time-series Library), in the disk that accompanies each copy of the book. Appendix C has more information on this program.

Comments from Instructors

"This is the best first year econometrics text on the market. I have looked at about everyone that comes out. None of the others offer the blend of theory, application, and demonstration that this one does. Its three greatest strengths are the step-by-step demonstration on how to put into practice what has been discussed, the balance between micro and macro applications, and the gray boxes (i.e. the properties and assumptions put into neat and easy to read and digest pieces)."
Anthony Carilli, Hampden-Sydney College

"A great feature of the book is the fully worked out examples -- this gives the students guidance and brings some reality to the theory."
Graham Elliott, University of California, San Diego

"The main strengths of this book are: (i) an appropriate balance between theory and practice, (ii) dedicating a separate chapter to carrying out an empirical project, and (iii) not forcing instructors to use only ESL or SHAZAM software, but giving them a choice by providing data sets also in ASCII/Excel/Eviews format."
Phanindra V. Wunnava, Middlebury College

"Ramanathan presents econometrics with a degree of rigor suitable for smart undergraduates who are willing to work, without presuming a familiarity with linear algebra. The text allows the professor to choose his or her degree of emphasis on derivations versus applied work. It comes with a wealth of data, empirical examples, and problem sets, to be worked with and without using the supplied econometric software."
Allin Cottrell, Wake Forest University

"In my opinion, this is one of the best textbooks for teaching undergraduates. Numerous real examples, intuitive explanations and emphasis on hands-on practices, among many others, are very distinctive features of your book, from which, I believe, students will benefit in various ways."
Hyeon-Seung Huh, Hallym University, South Korea>

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