Honors/Independent Study

Economics Department

Format for an Econometrics Paper

An econometric paper should conform to the following generally used format:

I. Introduction and literature review

Discuss what you will attempt to do. It is often a good idea to state the question that your paper will attempt to answer. If this were a term paper, this section should contain a review of the literature of relevant theory and of other studies relating to this question. If applicable discuss any controversies which your paper will attempt to resolve. Examples, which should be expanded upon, include:

This paper attempts to explain the determinants of investment spending by business firms.
This paper attempts to determine the extent to which changes in the money supply affect inflation.

II. Specify the Model

The model should be stated here in general terms. For an econometric project, this section should consist of the general form of the model and an explanation of the causality of each of your independent variables. The model should include, and at least discuss the reasons for not including, variables suggested by economic theory or used by others researching this subject. A general form of the equation should look something like:

expected signs ->   - + -
               I = f(r, Y, X)

          I = Investment Expenditures by Business Firms
          r = Interest rates
          Y = Incomes
          X = Excess Capacity of Business firms

Interest rates are the opportunity cost of funds used for business investment expenditures. If the interest rate rises, some investment projects which were profitable may no longer be profitable. Therefore, an increase in interest rates will lead to a decline in investment expenditures, holding incomes and excess capacity constant. The expected sign is therefore negative.

As incomes grow, consumers are expected to increase their purchases. This increase in consumer spending will create excess demands for goods and services. These shortages will cause business firms to want to increase their production. To do so they will increase the amount of capital goods that can be used for production. Thus rising incomes are expected to increase the amount of business investment expenditures. The expected sign is therefore positive.

[Each of the independent variables should have a summary of the theoretical argument for its inclusion and its expected sign in this section.]

III. The Estimated Model

Data are not always perfect, the researcher must fit the model from section II to the data as best you can while remaining faithful to the theory. In this section you specify the exact
functional form of your estimating equation and a description of the (proxy) variables used represent the concepts in your model. For example, the estimating equation, using quarterly US data, might be:

     I(t) = B0 + B1r(t) + B2Y(t-1) + B3X(t)

Subscripts (shown here in parentheses) indicate time periods;
          t = current time period
          t-1 = previous time period
          t-2 = two time periods ago, etc.

     I = Gross Private Non-Residential Investment ($1987)
     r = Prime rate of interest less the inflation rate as measured
          by the Consumer Price Index
     Y = National Income (1987$)
     X = 100% minus the Capacity Utilization in manufacturing (%)

Explain the variables carefully enough so that readers will readily understand the results presented in the next section.
Explain carefully any calculations that you performed on that data,
e.g., real interest rate = prime interest rate minus inflation rate as measured by the CPI.
Enough detail should be provided so that a reader could locate the data that you used and replicate your results.
Provide the exact source of your data, e.g., National Income Accounts, Survey of Current Business, etc.

IV. Present Your Results

This section contain all of the relevant statistical results of your regression in an easy to read format. Round your numbers off at reasonable points. For example, a t-statistic of 4.7654293 is not reasonable. At a minimum, you should present all of the coefficients, their t-statistics (or their standard errors or both), sample size, adjusted R2. If you are using time-series data, present the Durbin-Watson or Durbin's h-statistic. Include any other statistical information which from which you draw inferences, e.g., beta-weights, elasticities, etc. The correlation matrix should also be presented. If any correlation coefficients seem high (i.e., greater than, say, 0.75 in absolute value), VIF test results should be presented.

The presentation of the numbers, should be accompanied by a verbal interpretation of the important aspects of those results. Highlight those results that relate to the major purpose of the study as stated in the introduction. This section should state that the coefficients of interest are within reasonable ranges or make note of the fact that some or all of them are not reasonable. Do not spend time explaining less important results. Interested readers can see them for themselves. Point out any statistical shortcomings of the results, for example, is multicollinearity or serial correlation present?, is the R2 low?, is the standard error of the estimate high?. It is better that you point these things out than that the reader discover them and find no reference made to them, lest the reader think that you either did not notice them yourself or that you did not understand their implications. Readers appreciate candor on these issues.

V. Conclusions

The conclusion is not the place to introduce new information; that should have been done earlier in the paper. In this section you should (verbally) discuss your results in terms of the question asked in the introduction. Avoid using numbers in this section; you presented your numbers in the previous section.

Review for the reader: "the" question, your method for analyzing it, and your findings. Then clearly state the answer to the question asked at the beginning? Do your findings confirm or refute the theory being studied or the hypothesis being tested? What are the implications of your findings? What practical suggestions can you make for someone who wants to use your work as a beginning point and take it further?

Structure for an Economics Paper

I. INTRODUCTION

A. State your question.

B. Explain why it is interesting.

C. Give a guide for the rest of the paper:

"In section 2 I will provide a review of the literature relating to this question. Section 3 looks more closely at... Section 4 addresses... Section 5 provides some concluding remarks."

II. LITERATURE REVIEW

A. How have other people answered your question, or one closely related?

"A number of authors have addressed question X. One can divide their ideas into three rough categories...."

III. YOUR CONTRIBUTION: WHAT DO YOU THINK THE ANSWER IS, AND WHY.

A. Explain why you agree or disagree with the arguments discussed in the literature review.

B. Present a theoretical model.

C. Present new evidence.

a. Case Study

b. Empirical data

a. simple tables

b. regression analysis

IV. CONCLUSION

A. Briefly restate your question, your answer, and the main reasons for your answer.

B. Does your answer have any relevance to debates about government policy?

*****************************************************************

Essential items:

*A one-sentence, central question somewhere in the introduction, repeated in the conclusion. This has to be a real question, with a question mark at the end! Division into sections, with section headings (generally 4-6, including introduction and conclusion.)

CITATION STYLE FOR AN ECONOMICS PAPER

EXAMPLES:

According to Jones (1984: 32), pig smell depends directly on pig size.
It has been argued that pig smell depends directly on pig size. [Jones (1984: 32)]
Jones (1984: 32) maintains that "big pigs smell the worst".
One authority feels that "big pigs smell the worst". [Jones (1984: 32)]

At the end of the paper, alphabetically by last name, put:

References

Jones, A. S. (1984) "Pigs and Smells", The Journal of Pig Science, 12-3, 234-245.

Smith, L. and Jones A.S. (1991) Pigs Who Smell Too Much (Prentice-Hall: Englewood Cliffs, NJ)

JOURNALS: author(s), (year), "Article Name", Journal Name, journal volume-journal number, page numbers---

BOOKS: author(s), (year), Book Name (Publisher: City)

Honors/Independent Study

Honors Thesis

All Economics majors and minors who have a grade-point average of 3.5 or higher for all work in the major and a grade-point average of 3.0 or higher based on all work taken at Skidmore may be recommended by the department for honors in Economics. In addition to the description of Independent Study, the supervisor must submit a potential Honors Thesis after consultation with the reader(s), to the entire department before the last day of classes in the semester.

The honors thesis must be orally presented at the Academic Festival. To qualify for honors, a thesis must merit an A or A-. After the presentation, the department will meet to decide which thesis will be deserving of departmental honors. The department will keep a copy of all honors thesis and make them available to anyone who wishes to read them.

Summary Timetable for Honors Thesis

Semester before EC 371 or EC 372
Locate a prospective supervisor
Bring to the supervisor a written proposal
Obtain supervisor's approval
Select a reader
Submit "Application for Independent Study" form
Dept. meets to approve or reject proposals.

During the Semester

During the first week, student meets with supervisor and reader
Student sets up a regular meeting schedule with supervisor
Student attends regular meetings for Independent Study group
Three weeks before the end of the semester, student meets with supervisor and reader(s)
By the last day of classes, final copy of the Honors Thesis is submitted to all members of the Department of Economics.

During the final exam period, the honors thesis is presented and defended before the faculty of the Department of Economics.

Independent Study

An opportunity for qualified students to pursue research in any field of economics under the supervision of a member of the department. Independent Study proposals should evolve out of advanced courses taken in Economics and should fit into a student's entire course of study in Economics.

Students who are interested in doing independent study should seek out a member of the Economics Department to supervise their study well before registration for the semester in which the independent study will take place (i.e., March for a Fall semester, November for a Spring semester). At this time it is a good idea to bring a written proposal and plan of study to the prospective supervisor. During this first meeting the faculty member and student can talk about whether the project is feasible, how to refine the proposal, and whom to ask to be an additional reader. The Economics faculty member overseeing the independent study projects for the semester may become a third reader (unless she or he is already the sponsor or reader, in which case there will be only two readers).

An "Application for Independent Study" form, an accompanying proposal, the "Study Sponsor's Form", and the names of the supervisor and the reader must b e submitted to the Economics Department prior to the beginning of the semester during which the independent study is to take place. Prior to the first week of classes each semester, The Department will meet and will determine which independent study projects are approved for that semester.

The student, his or her supervisor, his or her reader, and the independent study director for that semester must meet during the first week of the semester to discuss the student's proposal and to offer advice and direction. The student is to set up a weekly meeting schedule with the supervisor and is to attend all meetings of the independent study group for that semester. The student, supervisor, and reader(s) meet again three weeks before the end of the semester, on which occasion the student defends his or her research paper and the supervisor and reader(s) make recommendations for revision. At the end of the semester, the supervisor and reader(s) meet to discuss a final grade for the research paper.

The independent study paper must clearly illustrate the connection of the research with previous courses in Economics and are at lease 10,000 words long, excluding end notes and a bibliography. The worth of the paper is judged by rigorous standards on the basis of thoroughness of the survey of the literature, methodology, coherence, depth of perception, etc.

Independent Study and Senior/Honors Theses
Information and Application

The Independent Study is a challenging experience enabling the student to engage in focused research on a topic in which he/she has background knowledge from a 300 level Economics course. While the Independent Study is primarily an individual research effort, the student will be required to attend weekly meetings with an Independent Study advisor and to participate in weekly meetings of the Independent Study Seminar with other students.

Seniors who may be eligible for Honors in Economics may submit a term paper that is written for any 300-level course to be considered for honors by the Department. To receive Honors in Economics, a student must submit a term paper that receives a grade of A- or better, defend that paper before the Department Faculty (at the end of the Spring semester), and be considered to be worthy of honors by the Economics faculty after that presentation.

Proposals for Independent Study should be submitted to the Department by March 30.

APPLICATION FOR INDEPENDENT STUDY or HONORS THESIS

SEMESTER: (circle one:) FALL / SPRING YEAR: ______

STUDENT'S NAME: ___________________________________

CLASS: _________

DATE OF APPLICATION: ______________________________

STUDY TITLE: ___________________________________________________

(Answer the following two questions on separate sheets of paper --
typed, 8½ x 11 -- and attached them to this form.)

1. Describe how the proposed study fits within your entire course
of study as an Economics major.

2. Describe your proposed plan, the question that this paper
will address, and the methodology to be used to answer it.

_______________________________________________________________

APPROVED_______________________________________(Advisor)

APPROVED_______________________________________(Study Sponsor)

APPROVED_______________________________________(Chair)

Summary Timetable for Independent Study

Before the Independent Study Semester Begins

Locate a prospective supervisor