Overview: The final project for this course is the creation of an econometrics analysis of a business, a policy, or an economic issue of your choice. The project is designed to guide you through the process of applying the key components of econometrics as introduced in this course.
Prompt: For this milestone, submit a paper that discusses how you will address the data limitations, empirical approach, and results for your final project. Specifically, the following critical elements must be addressed:
• Data
o What limitations could your data impose on the choice of empirical method? What are the effects of these limitations?
• Empirical Approach
o What empirical method(s) do you propose and why? Explain why it is appropriate to use the method(s).
o What are the limitations of your proposed empirical method? What possible alternative methods can be used? Be sure to address causes for these limitations, such as problems with the data or with interactions between variables.
o What is your model specification? What functional form of data do you use and why?
• Results and Robustness Check
o What are your preliminary results from initial runs in the statistical software? What is their relationship with the original hypotheses and research questions?
o Which violations of ordinary least squares (OLS) assumptions do you anticipate? Which diagnostic tests will you employ to check for the presence of violations of OLS assumptions?
o What are your secondary results from your test run through the statistical software? Interpret these test results and determine the presence or absence of problems.