This course covers the statistical tools needed to understand empirical economic research and to plan and execute independent research projects. Topics include statistical inference, regression, generalized least squares, instrumental variables, simultaneous equations models, and the evaluation of government policies and programs.

14.30 or equivalent. Students should be familiar with basic concepts in probability theory and statistical inference. The course includes a brief statistics review.

Classroom work: Two lectures every week and one weekly recitation.

Other work: In addition to the readings, there are 6 graded problem sets, an empirical project, and ungraded review problem sets at the beginning and end of the course. The graded problem sets have both analytical and computer-exercise components. The statistical analysis is to be done using SAS on server workstations. Help for new SAS users will be given in recitation. The empirical project consists of an attempt to replicate and extend a published empirical study.

Grades will be computed as follows: a total of 100 points, 5 points for each of the 5 best problem sets, 25 points for the midterm, 10 points for the project, and 40 points for the final.

Problem sets are mandatory and solutions should be submitted on time to receive credit. SAS logs should be submitted with solution sets. A grade of 50% or better on at least 5 problem sets is required in order to qualify for the final. Consult with classmates on problem sets and the project if you get stuck, but written solution sets should be your own work.

Card, D., and A. Krueger. Myth and Measurement: The New Economics of the Minimum Wage. Princeton, NJ: Princeton University Press, 1995.

DeGroot, M. H., and M. J. Schervish. Probability and Statistics. 3rd ed. Boston: Addison-Wesley, 2002.

Goldberger, A. S. A Course in Econometrics. Cambridge, MA: Harvard University Press, 1991.

Wooldridge, J. M. Introductory Econometrics. 2nd ed. Cincinnati, OH: South-Western College, 2003.

Wooldridge is the basic text. The material in Goldberger is more advanced and optional. DeGroot and Schervish is a recommended text for statistics review. Novice SAS users may find The Little SAS Book helpful.

Other readings (published journal articles) are as indicated on the course outline. These are available in a reading packet and online (*=in reading packet, MIT=MIT E Journals, J=Jstor.org). The class project also draws on material from Card and Krueger (1995).