ECMT6002/6702: Econometric Applications

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ECMT6002/6702: Econometric Applications

Semester 2, 2021

Applied Project

The applied project accounts for 30% of the total mark from ECMT6002/6702. This assignment assesses your ability to understand and critically appraise applied econometric studies, to apply econometric methods to economic data, and potentially, and potentially to collaborate with fellow classmates (if you complete the project in a group).

        You may form a group up to three members. Alternatively, you may also finish the project by yourself. You may use Ed discussion board to find potential group members. Make sure all group members agree on the way how you cooperate to avoid free-riding problems. All group members will receive the same mark for the project.

        The assignment is due on Friday, November 5, 2021 by 18:00 via Turnitin on Canvas. A submission announcement and link will be posted on the Canvas in week 12. Note: Each group can only submit the report once (by any member of the group) on Canvas to avoid high similarity scores.

        The report is expected to be 1.5-line spaced with font size at 12, and about 12 - 15 pages (including references, tables and graphs with appropriate size). You may use Stata or other software for the project. The software commands, codes and outputs should be included at the end of the report as part of appendix, which is not counted into the page limit. Please attach a group assignment cover sheet with the SIDs of all members.

        This project is about R3 : Review, Replicate, and Revise an empirical research paper by Card and Krueger (AER, 1994) “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania”. Both the paper and data (along with variable description) can be downloaded from Canvas.

        Review. [30%] The first part of the project is to read and review the paper after you care-fully read through the paper. You need to address the following (along with your comments):

○ The research question and literature.

– Why the research question is important or relevant?

– What are the main views/opinions about the question in the literature?

– How dose the paper contribute to the literature?

○ The empirical methodology and models

– State the empirical methods used in the paper.

– What estimation methods are used?

– Are the econometric assumptions reasonable or realistic?

○ Main results

– Interpretation of the estimate results

– How do the results answer the question?

– Any robustness check of the model specification?

Replicate [30%]. The second part of the project is to replicate the main results of the pa-per (Tables 3, 4 and 7 in the paper. Ideally, you could replicate the main results without simplification.

○ State the econometric models you will estimate and the estimation methods applied.

○ Report the estimation results in tables; do not directly copy and paste the estimation outputs from the software you are using. Compare them to Table 3 of the paper and make comments if necessary.

○ If you make any simplification or modification, make sure you clearly state the simplifi-cations. The bottom line for simplification is that, the simplified or modified model and method can still answer the research question.

Revise [30%]. The third part of the project is to revise (or refine) the paper.

○ Discuss limitations of the paper and potential extensions.

○ Propose at least one model that is different from those in the paper, and provide motiva-tion (or justification) for your proposal.

○ Estimate the proposed model, compare your results to those in the paper, and interpret the new results. You may put the new estimates as another column in the table from the second part.

○ Discuss how the new results from the proposed model address the research question and the difference from the results in the paper.

Note: The general writing quality of report accounts for 10%. Double check with your report to avoid grammar errors. Do not copy and paste the estimation outputs in the main text of the report. Make sure the equations, tables and graphs (if any) are well presented.