University of Waterloo Department of Economics Econ 323 Econometric Analysis 2 Fall 2018 TTH 11:30Am-12:50Pm Mc4021

University of Waterloo
Department of Economics
ECON 323
Econometric Analysis 2
Fall 2018
TTh 11:30am-12:50pm MC4021
Instructor: Emmanuelle Piérard

Office: HH 209
Phone: 519-888-4567 ext. 37712
Office Hours: Thursday 1-2:30pm
Email: [email protected]. When emailing the instructor, the subject line of the email
must contain ECON 323. You can only email the instructor regarding personal issues, e.g. why
you will not be able to attend a midterm. I will not answer any question about the material or
the structure of midterms, the final, etc. through email. Please use this address rather than
emailing me through D2L.
Course Description
This course covers the most important methods used in applied economics research beyond the
least-squares estimator. It starts by exploring solutions to the endogeneity problem in detail,
emphasizing proper ways of conducting causal inference. It extends the methods covered in
ECON 322 to the case in which the data are observed over time. Students will learn how to
estimate and interpret dynamic models and how these models affect our ability to do inference.
The course also covers methods for data in which the response variable is either qualitative,
with or without multiple levels, or count data. For that purpose, it introduces students to
maximum likelihood estimation, and the estimation of models by probit, logit, and Poisson
regressions. Assignments have the same data-based focus as in ECON 322.
Prerequisites: ECON 321, ECON 322 or equivalent.
Required Text
• Wooldridge, Jeffrey M., Introductory Econometrics – A modern approach, 6th edition,
2015, 912 p.
OR
• Stock, J. H. and M. W. Watson, Introduction to Econometrics, 3rd edition, 2015, 790 p.
Older editions of both texts are on reserve at DP. I do not expect you to buy yet another
textbook for this course. Use the text that you already own but if you do not own one, please
get access to one. A correspondence table for the topics covered in this class is available on
D2L. For Wooldridge, any edition (3rd and up) is fine.
Readings Available on LEARN
• I will post class announcements, notes, assignments and other relevant material on the
Desire2Learn network (learn.uwaterloo.ca).
Course Requirements and Assessment
Assessment Date of Evaluation Weighting

Assignment 1 Thursday September 27th 5%
Assignment 2 Tuesday October 16th 5%
Assignment 3 Thursday November 1st 5%
Assignment 4 Thursday November 22nd 5%
Midterm 1 Thursday October 4th 15 or 25%
Midterm 2 Tuesday November 6th 25 or 15%
Final During the final exam period 40%
in December
Total 100%
The best midterm individually will be worth 25%; the one on which you will have a lower mark
will be worth 15%. In order to pass the course, you must obtain a mark of at least 40% on the
final.
Note that there will be a bonus assignment worth 2 marks for this class. More details will be
provided later in the term.
Course Outline
Review of regressions using Cross-sectional Data
Limited Dependent Variable Models
Sample Selection Corrections
Instrumental Variable Estimation and Two Stage Least Squares
Simultaneous Equation Models
Regressions using Time Series Data
Panel Data Methods
Please refer to D2L for chapters relevant to these topics in Wooldridge and Stock and Watson.
Typically, we spend 3 weeks on the first 2 topics, 3 weeks on the next 3, 3 weeks on Time series
and the last 3 weeks are spent on panel data methods. This breakdown also corresponds
(approximately) to the topics covered on the assignments.
Late Work
Assignments are due at the beginning of class on the due date unless otherwise noted.
No assignment will be accepted after the correction of the assignment in class
therefore, such assignments will receive a mark of zero. Before the correction in class,
assignments are subject to a penalty of 5 percentage points per calendar day that you
are late.
Policies concerning assignments

Collaboration on assignments is highly encouraged but plagiarism is not. You must hand
in your own hand-written (except for the computer code and output) copy of the
assignment. Assignments will contain both an analytic part and a computer-based part,
for which you must use Stata or R. If you wish to use a different software package than
Stata or R, you must obtain the agreement of the instructor one week prior to handing
in the assignment. The instructor and TA will not provide any support in the use of
other software packages than Stata and R. Stata can be purchased through a grad plan
at lower prices than the list price (please see D2L on this) and is available in some arts
computing labs (PAS-1237 and 1098). Stating who you worked with on the assignment
is optional. Please use common sense when asking me to re-grade assignments.
Policy on Missed Tests

No make-up tests will be provided. Students who do not have a relevant medical
certificate will receive a mark of zero on any missed test and their final grade will be
computed in accordance with the formula specified above. For students who miss a test
(or more) and have a relevant medical certificate for all tests missed, the weight of the
missed test(s) will be transferred to the final. You must provide supporting
documentation within 48 hours of the day of the midterm or exam, if you want the
weight to be transferred to the final, for midterms, or if you want to write a make-up
final, for the final. The instructor reserves the right to deny you these privileges if the
documentation is not provided in a timely fashion. The economics department’s policy
on deferred exams is here: https://uwaterloo.ca/economics/current-
undergraduates/policies-and-resources/deferred-final-exam-policy
Policy on remarking of Tests

If you feel that your test was not marked properly, you must advise the instructor within
5 calendar days of the test being handed back to the students in class. Note that if you
want your test re-graded, I will remark the entire test (your mark may go up or down as
a result of this).
Electronic Device Policy
You are welcome to use your laptop during class time. Students who use cell phones
during class time will be asked to leave.
The use of recording devices is prohibited during class time. If you have a disability
documented by the OPD that warrants the use of a recording device in class, you must
provide the documentation proving this in order to be allowed to record classes.
Tutorials
Tutorials are optional. You are encouraged to attend as the material covered will
enhance your understanding of concepts covered in class. No new material will be
covered but the exercises and programming covered help you for the tests, assignments
and final.
Attendance Policy
Although presence in class is not required, it is highly recommended to attend classes. If
you miss a class, you are responsible for making up for it, whatever the circumstances. I
will not answer to emails and phone calls asking for information regarding the material
covered in class. During the last 24 hours before a midterm or final, I will not answer to
questions concerning material covered in class if you were absent and did not make a
reasonable effort to catch up.
Note on the scheduling of midterms, exams and religious holidays

If an exam or midterm falls on the day of a religious holiday that is not observed by the
university and you anticipate this to be a problem, you must consult with the associate
dean of the faculty of Arts regarding other arrangements. You have 1 week after the
announcement of the date of the midterm/exam to make a request of rescheduling
based on these grounds (i.e. you have one week after the first class for midterms and
one week after the schedule of the finals is publicized for the final exam). This is the
University’s policy.
Economics Department Deferred Final Exam Policy

Deferred Final Exam Policy found at https://uwaterloo.ca/economics/current-
undergraduates/policies-and-resources/deferred-final-exam-policy.
Cross-listed course
Please note that a cross-listed course will count in all respective averages no matter
under which rubric it has been taken. For example, a PHIL/PSCI cross-list will count in a
Philosophy major average, even if the course was taken under the Political Science
rubric.
Academic Integrity
Academic Integrity: In order to maintain a culture of academic integrity, members of

the University of Waterloo are expected to promote honesty, trust, fairness, respect and
responsibility. See the UWaterloo Academic Integrity webpage and the Arts Academic
Integrity webpage for more information.
Discipline: A student is expected to know what constitutes academic integrity, to avoid

committing academic offences, and to take responsibility for his/her actions. A student
who is unsure whether an action constitutes an offence, or who needs help in learning
how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group
work/collaboration should seek guidance from the course professor, academic advisor,
or the Undergraduate Associate Dean. When misconduct has been found to have
occurred, disciplinary penalties will be imposed under Policy 71 – Student Discipline. For
information on categories of offenses and types of penalties, students should refer to
Policy 71 - Student Discipline. For typical penalties check Guidelines for the Assessment
of Penalties.
Grievance: A decision made or penalty imposed under Policy 70 - Student Petitions and
Grievances (other than a petition) or Policy 71 - Student Discipline may be appealed if
there is a ground. A student who believes he/she has a ground for an appeal should
refer to Policy 72 - Student Appeals.
Appeals: A student may appeal the finding and/or penalty in a decision made under
Policy 70 - Student Petitions and Grievances (other than regarding a petition) or Policy
71 - Student Discipline if a ground for an appeal can be established. Read Policy 72 -
Student Appeals.
Accommodation for Students with Disabilities
The AccessAbility Services office, located on the first floor of the Needles Hall extension
(1401), collaborates with all academic departments to arrange appropriate
accommodations for students with disabilities without compromising the academic
integrity of the curriculum. If you require academic accommodations to lessen the
impact of your disability, please register with the AS office at the beginning of each
academic term.

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University of Waterloo

Instructor: Emmanuelle Piérard

Prerequisites: ECON 321, ECON 322 or equivalent.

• Stock, J. H. and M. W. Watson, Introduction to Econometrics, 3rd edition, 2015, 790 p.

Course Requirements and Assessment

Assessment Date of Evaluation Weighting

Review of regressions using Cross-sectional Data

Limited Dependent Variable Models

Sample Selection Corrections

Instrumental Variable Estimation and Two Stage Least Squares

Simultaneous Equation Models

Regressions using Time Series Data

Panel Data Methods

Policies concerning assignments

Policy on Missed Tests

Policy on remarking of Tests

Note on the scheduling of midterms, exams and religious holidays

Economics Department Deferred Final Exam Policy

Academic Integrity: In order to maintain a culture of academic integrity, members of

Discipline: A student is expected to know what constitutes academic integrity, to avoid

Accommodation for Students with Disabilities

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