APPLIED ECONOMETRICS
John S. Earle
Autumn, 1995
Department of Economics
CENTRAL EUROPEAN UNIVERSITY



Course Description

This course is the first part of a trimester-long sequence intended to provide students with some tools useful in applied economic research, as well as some practice in wielding them. The second part of the course will be taught by Professor Gabor Korosi. The text for both parts is The Practice of Econometrics, by E.R. Berndt (Addison-Wesley, 1991), which includes a diskette with several data sets. Although we will not require the use of any particular program, we hope to make several available to you from which you may choose. SPSS and LIMDEP are already available, and it is possible that there may be SAS, TSP, and M-TSP as well.

Assignments and Grades

In line with the desire of the department to make the second year program one in which you may somehow "design your own program" (subject, of course and as always, to feasibility constraints), this course will allow considerable latitude in the sorts of assignments which you complete. More than any other discipline with which I am familiar, however (with the possible exception of piano playing), ecom is a subject which is literally "learnt by doing," even if practice doesn't necessarily make perfect. Thus, we feel compelled to require some problem sets, in the form of computer exercises which must be turned in for evaluation. The exact nature of these will be specified anon. In addition, it would be a valuable experience for you to spend some time gathering your own data and doing an analysis along the lines of one of the chapters from Berndt. If you are going to do this for the first part of the course, it is due on October 24.

Because the textbook permits flexibility in the order and number of chapters, we will focus on some which may be both particularly valuable and of special interest to students. In the first part, we will try to cover chapters 3, 5, and 11. Professor Korosi will choose several of the remaining chapters to cover in the second part of the course.

Course Outline and Readings
(approximate number of class weeks in parenthesis)

1. Estimation-of a Production Function (1)
returns to scale, learning curves
Reading: Berndt, Chapter 3.
2. Estimating Earnings Functions (1)
human capital, unions, discrimination
Reading: Berndt, Chapter 5.
3. Labor supply estimation (2)
hours of work and participation decisions
Reading: Berndt, Chapter 11.



CRC-Curriculum Resource Center
CEU Budapest, Hungary
Modified: May, 1996

Ear_ApplEcon.F95Econ.v3

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