This part of the assignment will require substantial studying on your own, however, this task will be highly relevant for real-world use of econometrics. You are encouraged to choose a dataset as a group
- however, each of you has to provide their own write-up of their project.
Choose a topic and hypothesis of your choice, find an appropriate dataset, and estimate a regression model. Interpret your model in light of the assumptions you are making when estimating regression models. You can choose any topic or dataset that might interest you. If you need some inspiration, https://ourworldindata.org/ has fascinating long-run datasets, there is also a list of many datasets already included in R here: https://vincentarelbundock.github.io/Rdatasets/datasets.html, but you are welcome to use any data to answer any question you are interested in (for example: does smoking affect babies’ birthweight? Does rainfall increase ice cream sales? Has the introduction of airbags/seatbelts lowered car accident deaths? etc.).
Present your results in the form of a short written report (maximum1 length of 2 pages + references) following the structure below:
1) Introduction
Stating your hypothesis, why this topic is important and interesting.
2) Data
Describing your data (including sources and descriptions of variables), perhaps including a Figure.
3) Methods
Stating your estimated model, functional form you choose (log, etc.) and what assumptions you make.
4) Results
Showing your estimated model results in a Table including: coefficients, standard errors, number of observations, and R-squared (see below for an example in Table 1). Interpret your results carefully, conduct and interpret hypotheses tests (individual and perhaps joint).
Table 1: Estimation Results Dependent Variable = log(wage)
Intercept 1.02 (0.52)
Experience 0.55 (0.33)
Experience2 -0.05 (0.03)
Education 0.72 (0.23)
Number of Observations 342
R-Squared 0.76
Standard errors shown in parentheses.
5) Conclusion
Summarise your results and discuss what you conclude based on your findings. 6) References
References to the literature and data used.
Sample Solution