PPAI: 2035 Spring 2014 PPAI 2035 Advanced Empirical Methods for Public Policy Analysis Instructor: Syon Bhanot Location and Times: 67 George Street, 1st floor seminar room Monday/Wednesday, 1-2:20 PM Contact Information: Email: [email protected] Office: Blistein House 332 Office Hours: TBD Course Outline: The course introduces students to the use of regression analysis and program evaluation for analyzing data in the social sciences, with a strong emphasis on policy application over mathematical formalism. We will study a variety of designs for empirical public policy analysis through examples from policy, covering the use of large data sets to experimental evaluation methods, and students will have the opportunity to analyze some actual datasets. We will also study the strengths and weaknesses of various evaluation strategies. Goals: The goal of the course is to equip students with the tools and insights necessary to tackle the empirical analysis of public policy problems that they might encounter in a professional or academic environment. Specifically, by the end of the course, students will be able to: 1. Think intuitively about the use of statistical techniques in public policy analysis, and perform some technical statistical analysis 2. Acquire a good understanding of the issues involved in making causal inference from non-experimental data 3. Have a sense of the alternative techniques that are available when there are considerable problems with using OLS in a specific situation Prerequisite: A knowledge of statistics at the level of PPAI-2030 is assumed. Readings: The material for the course is primarily in the lecture slides and in lecture, though I will assign some readings as we go (these will be provided in PDF format). There are no strictly required books for the course, however I strongly advise you to acquire some of the following texts to aid your understanding and as a resource moving forward in your careers. I recommend the 1 PPAI: 2035 Spring 2014 following in particular: - - - Textbooks (choose one) o Stock, J. and M. Watson, Introduction to Econometrics, 3rd edition, Addison-Wesley (2010). **my preferred main textbook** o Wooldridge, J., Introductory Econometrics: A Modern Approach, 5th edition, SouthWestern College Pub (2012). STATA Guide o Cameron, C. and P. Trivedi, Microeconometrics Using STATA, Revised (2nd) Edition, STATA Press (2010). Books o Angrist, J.D. and J.S. Pischke (2009), Mostly Harmless Econometrics: An Empiricist’s Companion, Princeton University Press (2008). Assignments, Exams, and Grading: The assignments for this course are designed to enable you to practice the techniques of data analysis that we discuss in this course, and to think creatively about applying these techniques to a policy topic you care about. Specifically: - The memos are intended to help you think about topics of interest to you using course concepts, and build up to the final paper. - The final paper, which will give you a chance to use econometrics to explore a topic you are interested in. - The problem sets will ask you to work with real data to practice some of the technical skills taught in the course. - The final exam will test both your intuitive and technical understanding of the material. The schedule for submission is given below, along with the grading breakdown. Assignments are to be submitted right at the beginning of class on the day they are due, unless otherwise noted. Late assignments receive a 20 percentage point reduction every day. Assignment Name Assignment Given Out On: Assignment Due On: Grade Weight: Memo #1: Policy and Causality (500 words) Problem Set #1 1/29 2/5 2/3 2/26 5% 10% Memo #2: Pick Your Topic (750 words) Topic Presentation 2/12 2/19 2/19 3/31, 4/2, 4/7, 4/9 5% 10% Memo #3: Plan Your Topic (750 words) Problem Set #2 3/3 4/9 3/19 4/23 5% 10% 2 PPAI: 2035 Spring 2014 Final Paper (approximately 3500-4000 words) FINAL EXAM 5/7, 5 PM TBD PARTICIPATION 20% 25% 10% Academic Honesty: You are expected to follow Brown’s academic code. According to the code, “Students who submit academic work that uses others' ideas, words, research, or images without proper attribution and documentation are in violation of the academic code. Infringement of the academic code entails penalties ranging from reprimand to suspension, dismissal, or expulsion from the University.” If you have any questions about proper citation, talk to the professor or someone at the Writing Center. Students with Disabilities: Please inform me if you have a disability or other condition that might require some modification of any of these course procedures. You may speak with me after class or during office hours. For more information contact Student and Employee Accessibility Services at 401- 863-9588 or [email protected]. 3 PPAI: 2035 Spring 2014 Contents of the Course: Course Day Date Topic (SUBJECT TO CHANGE!) Day 1 1/27 Day 2 1/29 Day 3 2/3 Day 4 2/5 Day 5 2/10 Day 6 2/12 Day 8 2/19 Day 9 Day 10 2/24 2/26 Day 11 3/3 Day 12 3/17 Day 13 3/19 Introduction and Course Overview Validity, Randomization, and Observational Studies Policy Application: Class Sizes and Test Scores Linear Regression I Policy Application: Class Sizes and Test Scores II Linear Regression II, Dummy Variables Policy Applications: Class Size and Test Scores III & Wage Gaps Multiple Regression and OVB Policy Application: Clot-Busters and Heart Attacks Joint Hypothesis Tests Policy Application: Parental Education and Child Health NO CLASS ON 2/17 – Presidents Day Interaction Effects Policy Application: Poverty, Gender, and Education Using Quadratics and Logs Binary Dependent Variables Fixed Effects Policy Applications: Head Start; Alcohol and Driving Policies NO CLASS ON 3/5, 3/10, 3/12 – 1.5 Weeks Off Difference-in-Difference and Triple Difference Policy Application: Salience and Taxation (Chetty, Looney, and Kroft) Instrumental Variables Policy Application: Capital Punishment as a Deterrent (Ehrlich) NO CLASS ON 3/24, 3/26 – Spring Break Day 18 3/31, 4/2, 4/7, 4/9 4/14 Day 19 4/16 Day 20 Day 21 Day 22 Day 23 4/21 4/23 4/28 4/30 Day 14-17 Paper Topic Presentations Regression Discontinuity Designs Randomized Experiments Policy Application: Development Economics and RCTs Catch-Up Day The Econometrics Of… Gun Control The Econometrics Of… Taxation Advanced Topics: Matching, Synthetic Control Methods, Quantile Regression 4 Assignments Memo #1 Handed Out Memo #1 DUE Memo #1 Returned to you PS #1 Handed Out Memo #2 Handed Out Memo #2 DUE TP Handed Out PS #1 DUE Memo #3 Handed Out PS #1 Returned to you Memo #3 DUE TP DUE PS #2 Handed Out (4/9) Memo #3 Returned to you PS #2 DUE PS #2 Returned to you PPAI: 2035 Day 24 5/5 5/8, 2 PM Spring 2014 Wrap-Up and Exam Review FINAL EXAM 5