Semester:
Offered:
ECON 1126 is an advanced econometrics class that focuses on the analysis of empirical quantitative models that are commonly used in applied economics. We focus first on studying the mathematical and statistical foundations of using linear models. This includes approximating conditional expectations, forming predictions, studying omitted variables bias, and most importantly analyzing requirements for causal interpretations. The class uses real world data as a vehicle to illustrate the theoretical concepts. Applications include the demand and supply model of simultaneous causality, panel data and Instrumental Variable methods, among others. Emphasis will be placed on the limits in learning and understanding causal relations in economics using observational data alone. We also discuss the use of economic models that supplement the data to obtain a framework for economic policy evaluations. Students should have a background in statistics (such as Stat 110) and mathematics (as as Math 21A or equivalent).