In this course, we will study how econometric methods can help answer causal questions that are important for public policy. We will discuss why establishing credible causal links is difficult in social sciences and how to overcome some of the challenges. We will start by introducing the basic tools of applied econometrics: linear regressions and statistical tests. Then, we will outline several methods central to modern econometric practice: experiments, instrumental variables, regression discontinuity designs, fixed effects estimations, differences-in-differences and event studies. Finally, we will introduce some recent extensions to the econometric models and highlight current debates. Each topic will be illustrated using examples of real-life applications relevant for the policy debate, such as: how important is intergenerational mobility; why does poverty persist; how large are the returns to education; what is the effect of immigration on local labor markets.
During the tutorials, students will work in group to critically assess societal questions. The first exercise will consist in hypothetical scenarios, while in the second and the third exercises, students will receive actual data to work on. More specifically:
- Students receive a problem set detailing a societal question and listing a series of data available to the researcher.
- Students have to discuss how to solve the counterfactual problem using the data available and under which assumptions the solution is credible.
- Students have to propose a methodology to answer the question, listing its strengths and weaknesses.
- In some exercises, students receive actual data and have to implement the methodology themselves.
- Summarize the findings in a presentation in front of the class.
The evaluation consists of two parts, each weighting 50% of the final grade:
- Oral presentations in groups (3 short pres. based on exercises done in small classes)
- Term exam
