research in applied economics an introduction to the module 2006/7 ian walker module leader 2005/6...
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Research in Applied Economics An Introduction to the Module 2006/7
IAN WALKERModule Leader 2005/6
S2.109 [email protected]
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Idea behind the module• Economics gets everywhere
– and you have seen only a small fraction of it• This is your chance to dictate the content of your
studies• Gives you a chance to apply your new skills in
economic analysis• Allows the opportunity to develop analytical and
presentational skills– Shows that you have good non-cognitive skills
• Gives you a topic that you can talk about in depth and with enthusiasm– in interviews
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Components of the module• Lectures in term 1
– To provide guidance on methods, data and software
• Library – “Information skills” support
• Classes in terms 1 & 2– To provide generic guidance within each topic area– To give individual feedback– To promote and monitor individual progress– No help after end of Term 2 – “tough love”
• Project (80% project - 20% preparatory work)– 5000 words– Deadline: start of term 3 in 2006/7
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The RAE work programme• Check feasibility of idea (this summer)• Make initial presentation (about week 5)
– Get feedback and develop idea
• Present lit review (about week 9)– Decide on the big issues and your “angle”
• Data presentation (about week 12)– Demonstrate that useful data is accessible and you
understand it
• Final presentation (about week 18)– Fine tune during Easter vacation
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Staff• Module leader and lecturer
– TBA
• Library staff– Help with textual databases and e-collections
• Tutors– Broad range of expertise in applied research– Active researchers in the field
• Often away, email for appointments
• Tech support (usually a PhD student doing applied research)– Guidance with getting data, using software, etc
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What is an RAE project?• Your OWN work, and your OWN topic
– NOT an essay, NOT a survey
• Has to have some economic content– Not just an econometric/statistical exercise
• Has to have some value added– May even be original
• Not necessarily regression analysis– We strongly encourage diversity– “theory”, “simulation”, “policy evaluation”, “experiment”,
“meta-analysis”
• Emphasis is on evaluation– Other’s work, your own work, what you might have done
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What do you have to do?• Think about what you might like to do – before Oct• Attend (about 18) lectures in term 1
– Source of ideas, stimulation, basic skills, and guidance– All notes available on RAE website
• Attend information skills sessions in term 1– Full-text (JSTOR etc), lit databases (EconLit, SSCI etc)
• Attend classes in terms 1 and 2– Make presentations
• Preliminary idea, Lit review, Data availability, Results/findings
• Write up project during Easter vacation– critically appraise lit, acquire data, use stats
packages/spreadsheets, evaluate your OWN work
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Examples of recent topics• A “reciprocity” experiment in a restaurant
– Simple critique of important neoclassical economics idea
– No econometrics, simple “controlled” experiment• The effect of “winter fuel allowance” on fuel
expenditure– Microeconometric analysis exploiting “natural
experiments” in policy reforms– Test of “behavioual economics”
• Effect of cocaine prices on crime rates– Time series analysis– Elasticity, deadweight loss, cointegration etc.
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More examples• How gas suppliers could use weather forecasts to
hedge risk– Clever application of financial futures model
• Economic determinants of sleep– Opportunity cost of time– Econometric analysis of UK Time Use Survey data
• Effects of Disability Discrimination Act– Simple labour economics– Analysis of wages of disabled workers in large and small
plants before and after policy enacted - difference-in differences
• How does wealth affect longevity– Analysis of large UK panel dataset
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Yet more examples• The income elasticity of labour supply
– Diff-in-diffs exploiting the Child Tax Credit reform
– Looks at labour supply of mums before and after reform compared to non-mums
• Wages of immigrants– Simple econometric analysis of General
Household Survey data
• Gender effects in dictator games– Lab experiment on students
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Fertile areas• Wage determination
– LFS data is large and available 93-03– Lots of ideas to focus on
• Education, discrimination, regions, disability, ethnicity, immigrants, language skills, BMI (in BHPS and some GHS)…..
– Lots of techniques to try• “quantile” regression, selectivity model, endogeneous “treatment”
• Expenditure patterns– FES (now called EFS) is large and available 78-03
• Very detailed data, income variation, relative price variation
– Possible angles• effect of a “fat tax”; effect of opening hours variation on alcohol
spending; purchases via internet; credit card use; regional differences; ethnic differences; child gender effects……..
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More fertile areas• Welfare reform and policy evaluation
– Build a spreadsheet model to analyse some issue• Pension reform?
– Evaluation of some recent policy• Educational maintenance allowance?
• Transport economics– Elasticity of demand for petrol, travel to work, commuting
• Health economics– Effect of exercise on health, elasticity of supply of nurses,
effect of AIDS on growth, effect of prescription charges• Social issues
– “Social” capital (GHS 02), friendships (BHPS), happiness (BHPS), parenting (BHPS), neighbourhood renewal (ONS N’hood data), do step-children do worse, time use
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What should you do – NOW ?• Identify your idea (or, at least, your general area)• Think about your area of interest:
– Monetary, Financial, IO, Labour, Public, Development ..– Health, Environment, Sport,, Culture, Transport ..
• Perhaps consult your Personal Tutor?• Identify the BIG issues in your topic
– The Economist, New Scientist, Cosmopolitan………• Think narrow, think deep• Browse the literature
– Big journals (AER, JPolEcon, QJE, EJ, ….)– Applied journals (JoLabEcon, JoHealthEcon …)– Survey journals (JEconLit, JEconPersp, JEconSurv…. )
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Ensure you have minimal IT literacy and presentational skills• Sign up for
Warwick Skills Certificate modules
• And work through Key Skills On-line
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Consult RAE website• Links to tutors• Advice on how to do well (and badly)• Data and software advice• Links to useful sources of info• ppt’s and pdf’s of all lectures
– ppt’s contain “live” (clickable) links– pdf’s are in “handout” format for economical printing– Updated week by week – Normally available a few days ahead of lectures
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Check it outhttp://www2.warwick.ac.uk/fac/soc/economics/ug/modules/3rd/ec331/details/docs/
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What you have to do early next term
• Sign up for an RAE tutor– Check website class times, tutor areas of expertise
• Ensure easy access to a PC (forget the iMac)– Slow is OK, 256mb+ is good if you use “micro” datasets– Broadband internet access is useful for downloading– Start practising “safe research” - lock it up, and back it up!
• Consider buying some econometrics software– PCGive, SPSS …….. EViews …. STATA
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Helpful reading• Know some basic statistics/econometrics
– J.M. Wooldridge “Introductory Econometrics”– J. Stock and M. Watson “Introduction to
Econometrics”
• John Kay’s “The Truth about Markets”– http://www.thetruthaboutmarkets.com/
• Steve Levitt’s “Freakonomics”– http://www.freakonomics.com/
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Summary• You are responsible for you own progress
– You CAN do very well– But you can choose to do very badly– The harder you work the more help your tutor will be
• If you want to do well - time management is very important– start TODAY!
• Data is generally much harder to get than you might imagine– Think about this as soon as possible
• God made this summer “vacation” for RAE work– Next summer is for Ibiza!