University of Alberta

Department of Economics
Applied Econometrics
ECON 599, WINTER 2020

Instructor: Xingfei Liu

Office: Tory Building-7.22
Telephone: 780-492-5942
Fax: 780-492-3300
E-mail: [email protected]
Lecture room: TB 108
Lecture time: Tuesdays-Thursdays 11:00 – 12:20
Office Hours: Tuesdays-Thursdays 13:30am – 14:30am. Or by appointment

Course Description

This graduate level course covers a variety of topics in applied econometrics and offers wide range
of estimation procedures and technical tools that are necessary to identify selected commonly used
empirical models that are based on micro-level data. It is extremely useful in providing hands-on
research experience to senior graduate students in economics. The course will also introduce
technical tools that are useful in evaluating implemented/proposed policy changes.

The course will focus on techniques that are commonly employed in applied microeconomics. It
starts with basic classical linear models, then moves to more general methods such as maximum
likelihood estimation; generalized methods of moments; panel data analysis. Specialized topics
such as discrete choice models, censored regression models will also be introduced. It further
includes empirical subjects in Treatment Effects/Policy Evaluations. Finally, it will briefly cover
structural models in both static and dynamic environments. This course will mainly focus on
empirical application although some necessary theoretical elements will be provided. STATA and
SAS are the main software packages used in the course. By the end of the term, students are
expected to learn econometric techniques and practical skills that can help them to carry out serious
empirical studies at graduate level. A term paper is required for this course.

Course Prerequisites

ECON 598 or equivalent. Prerequisites are enforced by the Department of Economics. No

Exceptions. Students’ registration in the class will be cancelled if they have not taken (and passed)
the prerequisite (or equivalent.)
Textbooks (not mandatory)

Green, W. (2017) “Econometric Analysis”, 8th Edition, Pearson Education.

A.Colin Cameron and Pravin K. Trivedi (2005) “Microeconometrics: Methods and Applications”
Cambridge University Press.

Guido W. Imbens and Donald B. Rubin (2015) “Causal Inference for Statistics, Social, and
Biomedical Sciences: An Introduction” Cambridge University Press.

Additional Reading Texts

1) Cameron, A. C. and Trivedi, P. K. (2010) “Microeconometrics Using Stata”, Stata Press.

2) Hall, A. (2005) “Generalized Method of Moments”, Oxford University Press. (available
for free as an electronic text via UofA Library)
3) Angrist, J. D. and Pischke, J. (2009) “Mostly Harmless Econometrics—An Empiricist’s
Companion”, Princeton University Press.
4) Other resources will be added to the course web page throughout the semester.

STATA & SAS

In this course students will learn how to use the statistical software STATA. The computer-based
questions will require the use of Stata. For any different options of buying STATA see the link
below: http://www.stata.com/order/new/edu/gradplans/student-pricing-nodl/
Students are highly recommended to install STATA on personal laptops. It is also FREE to
access STATA through University Computer labs. Registered graduate students with Econ major
can access the department lab on the 9th floor in Tory building.
SAS University Edition is available for free from: https://support.sas.com/en/software/university-
edition.html Students are recommended to install SAS University Edition on their laptops.

Topics (to be covered)

Topics Weeks
Data Structures, Causal and Non-causal models 1
Linear Models and IV 1
Panel Data Analysis 1
MLE and GMM 1
Discrete Choice Models 1
Treatment Effects and Policy Evaluation 1.5
Survival and Duration Data 1
Selection Models 1
Testing 1
Structural Models: Static 1.5

Page 2 of 7
 Structural Models: Dynamic Programming 1.5

*Note: Structural modelling is likely to be introduced (if at all) towards the end
of the semester, so it is not recommended to write a term paper based on this
method. Relevant resources (papers, codes, data etc.) will be posted throughout
the term.

Course Evaluation

Assignments (2): 10% (Feb and March)

Term Paper proposal: 5% (25th Feb)
Empirical paper replication: 15% (5th Mar, tentative)
Computer labs: 10% (5 lab sessions starting Jan 22nd, subject to change)
Term Paper presentation: 5% (April)
Term Paper: 30% (9th April)
Final Exam: 25% (To be scheduled by the exam office)

Note: No extra credits will be given beyond the above listed items in this course.

Email Communication

Please send emails from your UofA account and kindly include ECON 599 in the subject line

Class Attendance

Students are highly encouraged not to miss lectures, although class attendance is not mandatory
for the course, as important announcements and key lecture notes will be presented in class. It is
also important to visit our course website on a regular basis, since this is the place to find relevant
course materials such as lecture notes, papers, assignments, etc.

Assignments

Assignments will be posted on the course website at least 1 week before their due dates.
Late submission of any work is NOT accepted, and there is NO make-up option for any delayed
work.

Page 3 of 7
Term Paper:

Any topic in the area of applied economics that uses one or more of the advanced techniques
covered in this course may be selected. Papers focusing primarily on time series techniques will
not be accepted for this course. Term paper preparation discussions are to be scheduled
individually by appointments. Topics and relevant details of the term paper will be discussed
during the individual meetings. It is recommended that appointment be made early rather than later
in the semester. Further details regarding the term paper are available on the course web page.

The term paper must be completed in order to pass the course. The term paper proposal is also
required. The term paper will not be graded without the approval of the proposal.

Two copies of the term paper must be submitted: (1) a printed hard copy; and (2) an electronic
copy (Word or PDF). Copies of the data, program and output files used to generate all results
presented in your paper must be submitted via e-mail or on a USB stick.

Paper Replication

There will be a task for students to replicate main results from a selected empirical paper (the
choice of the paper will be announced in class) in the micro empirical literature. In particular,
students are asked to read and understand the selected paper in terms of its methodology and
econometrics techniques. Students are then expected to independently replicate the main (or part
of the main) results from the selected paper. This exercise provides an excellent training
opportunity for the final term project.

Final Exam

Final exam will be cumulative, covering ALL topics that are covered in the course. A student who
misses the final exam because of illness or any other compelling reasons (including religious
conviction) may apply for a deferred final exam. Students seeking a deferred exam need to apply
to their own Faculty. The instructor does not have the authority to approve such applications.
Students can access your final grade on Bear Tracks.
Sample exam questions will be posted on course webpage prior to the exam.
Note: deferred final exams will take place in the economics department offices. Schedule is
pending and will be announced later.

Lab Sessions

There will be a computer session (in lecture time) every other week to practice program coding
In STATA and SAS. The materials will be distributed prior to the session. Lab sessions will be led
by tutorial leader who is senior Ph.D. student from the economics department. There will be 5 lab
sessions to be completed throughout the semester. Labs are expected to be completed with personal
laptops. Students are encouraged to install Stata and SAS on their laptops. SAS University Edition

Page 4 of 7
is available online for free. The scheduling of lab sessions will start in the last week of January
and will be adjusted accordingly depends on the pace of the course. It is highly recommended that
students attend ALL lab sessions, as labs are an integrated part of this course.

Course University Grading Scheme

Final course grades are determined according to the University Calendar §23.4:
“Grades reflect judgments of student achievement made by instructors. These judgments are
based on a combination of absolute achievement and relative performance in a class.” The
following table tentatively provides transition guideline from numerical grade to letter mark. The
actual distribution of the letter grade depends on the realized performances of all students in the
class.

Range Letter Grade Range Letter Grade

0 - 50 F 70.1 - 75 B-
50.1 - 56 D 75.1 – 79 B
56.1 - 59 D+ 79.1 - 82 B+
59.1 - 63 C- 82.1 - 86 A-
63.1 - 67 C 86.1 - 90 A
67.1 - 70 C+ 90.1 - 100 A+

Grading in Graduate Courses

Description Letter Grade Grade Point

A+ 4.0
Excellent A 4.0
A- 3.7
Good B+ 3.3
B 3.0
Satisfactory B- 2.7
C+ 2.3
C 2.0
C- 1.7
Failure D+ 1.3
D 1.0
F 0

Page 5 of 7
Code of Student Behaviour, Plagiarism and Cheating

The University of Alberta is committed to the highest standards of academic integrity and honesty.
Students are expected to be familiar with these standards regarding academic honesty and to
uphold the policies of the University in this respect. Students are particularly urged to familiarize
themselves with the provisions of the Code of Student Behavior and to, avoid any behavior, which
could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or
participation in an offence. Participation of any offence under the code is serious and can result in
suspension or expulsion from the University.

Please read these important documents at your earliest convenience.

Excerpts from the University of Alberta Code of Student Behaviour

30.3.2 Inappropriate Academic Behaviour

30.3.2(1) Plagiarism No Student shall submit the words, ideas, images or data of another person
as the Student’s own in any academic writing, essay, thesis, project, assignment, presentation or
poster in a course or program of study.

30.3.2(2) Cheating
30.3.2(2) a No Student shall in the course of an examination or other similar activity, obtain or
attempt to obtain information from another Student or other unauthorized source, give or attempt
to give information to another Student, or use, attempt to use or possess for the purposes of use
any unauthorized material.
30.3.2(2) b No Student shall represent or attempt to represent him or herself as another or have
or attempt to have himself or herself represented by another in the taking of an examination,
preparation of a paper or other similar activity. See also misrepresentation in 30.3.6 (4).
30.3.2(2)c No student shall represent another's substantial editorial or compositional assistance
on an assignment as the Student's own work.
30.3.2(2) d No Student shall submit in any course or program of study, without the written
approval of the course Instructor, all or a substantial portion of any academic writing, essay,
thesis, research report, project, assignment, presentation or poster for which credit has previously
been obtained by the Student or which has been or is being submitted by the Student in another
course or program of study in the University or elsewhere.
30.3.2(2) e No Student shall submit in any course or program of study any academic writing,
essay, thesis, report, project, assignment, presentation or poster containing a statement of fact
known by the Student to be false or a reference to a source the Student knows to contain
fabricated claims (unless acknowledged by the Student), or a fabricated reference to a source.

For further information regarding plagiarism and cheating please refer to the
A GUIDE TO ACADEMIC INTEGRITY FOR GRADUATE STUDENTS:
http://www.tie.ualberta.ca/~/media/tie/Documents/AI_Grad_Guide.pdf

Page 6 of 7
Policy about course outlines can be found in the Evaluation Procedures and Grading System
section of the University Calendar.

Audio or video recording of lecture, labs, seminars, or any other teaching environment by students
is allowed only with the prior written consent of the instructor or as part of an approved
accommodation plan. Recorded material is to be used solely for personal study, and is not to be
used or distributed for any other purpose without prior written consent from the instructor.

Note: The use of unauthorized materials, dictionaries, programmable (graphing) calculators,

and/or electronic communication devices is NOT permitted during tests or exams. The use of any
electronic recording device is NOT permitted during lectures. Please be courteous by turning off
your cell phone, muting your laptops etc. at the door! It is required that you have your student ID
with you for term tests and finals.

Useful resources:

Student Accessibility Services: If you have a condition that may require some classroom or
exam modifications, please contact SAS (www.ssds.ualberta.ca) to obtain a determination as to
what accommodations should be made. [More possible syllabus statements here].
Student Success Centre: The Student Success Centre (www.studentsuccess.ualberta.ca)
offers a variety of learning resources, including a variety of workshops in learning effective
study and exam strategies. Sessions are available in person and online, for a modest fee.
Centre for Writers: The Centre for Writers (www.c4w.ualberta.ca) offers free one-on-one
writing coaching to all students. Students can request consultation for a writing project at any
stage of development, including completed and graded work.

Notes:

The Department of Economics General Office is CLOSED from 12-1 PM.

Page 7 of 7