Economics 421

ECON 421

1. Catalog Entry

ECON 421

Credit hours (3)
Prerequisites: STAT 200; ECON 205, ECON 206; MATH 126 or MATH 151

This course deals with the application of statistical methods to business and economic data. The reading and interpretation of statistics will be stressed in ECON 442.

2. Detailed Description of Course

The objective of the course is to teach students how to apply statistical methods to analyze economic data, test economic theories, and produce forecasts.  It uses the least squares regression theory to produce estimators.  It analyzes how to deal with problems found in economic data, such as heteroscedasticity, autocorrelation, and multicollinearity.

Topic Outline
    1) Statistics in Economic Theory and Business Decision Making
    2) Review of Statistical Methods
    3) Least Squares Regression Theory
    4) Distribution Theory and Hypothesis Testing
    5) Goodness of Fit Measures
    6) Problems in Regression
    7) Cross-Section and Time Series Regressions

3. Detailed Description of Conduct of Course

The following teaching strategies will be employed:

Lecture, discussion, homework sets with heavy computer use.  All students have to write a paper using economic data and demonstrating their knowledge of econometric concepts.

4. Goals and Objectives of the Course

Students at the end of the course should be able to:

    1) Derive the least squares estimators in the simple regression model.
    2) Do hypothesis testing using the specific values of the estimators.
    3) Write and execute computer programs that detect and correct for (a) autocorrelation,
       (b) heteroscedasticity, and (c) multicollinearity.
    4) Read most of the results on a SAS computer printout including the ANOVA table and the
        R-squared statistic.
    5) Use econometric models to make predictions.

5. Assessment Measures

    1) Test I 200 points
    2) Test II 200 points
    3) Homework Sets 100 points
    4) Paper 200 points
    5) Final Exam 300 points

Grades are assigned according to the customary 10-point scale.

6. Other Course Information


Review and Approval

September 2, 2014
December 2013 C. Vehorn
April 16, 2012
September 2001 N. Hashemzadeh, Chair