Economics 306

Towson University, Department of Economics

Group Project
Manley & Palmateer

Goal
This group project helps you practice how to:
Frame a good research question
Select and specify testable hypotheses
Edit and examine economic data using Stata
Calculate and interpret descriptive statistics
Create charts and tables
Conduct regression analysis
Describe and interpret regression results
Identify potential issues
Address issues appropriately
Write effectively! Make a point.

Grading

The assignment is worth 500 points in total. An on-time submission of your proposed
topic and dataset is worth 20 points. Next I will need to see your model, which is worth
10. Having completed your regression analysis on time is worth 20. The Literature
review is worth 40, and responding to a questionnaire at the end about how your group
worked is an additional 10. The final paper is worth 400 points, 20% of your final grade.
After I have graded papers, I will take into account your description of your group as I
award points.

Please hand in one paper per group. Papers should be formatted as Word documents
and submitted online through Blackboard. Late papers will be harshly penalized, and if
you do not have a great excuse you will receive a zero.

I will grade the papers based on the quality of your writing (including well-formatted
and labeled tables and graphs), the application and understanding of multiple
regression, your literature review, whether you cite supporting materials appropriately,
and how well you answer your research question overall. Keep in mind that empirical
results are what they are and you should not be disappointed if they do not show what
you had hoped they would. The statistical significance of your results will not influence
your grade.

Timeline

Proposal: topic and dataset

Literature Review
Model
Regression Analysis
Paper submission
Ex post analysis of your groups work

Project proposal and submission of data

Proposal

As a group, you will have to decide on a research question and write a brief proposal
that motivates your chosen topic. You also need to share with me the data you plan to
use to do your study. The proposal and dataset are worth 20 points.

Data

Part of your assignment is to find data you can use for your investigation. Here are
some sets of data that people have used before:
The Panel Study of Income Dynamics (PSID) began in 1968 with a nationally
representative sample of over 18,000 individuals living in 5,000 families in the United
States. One person per family is interviewed on a regular basis. Between 1968 and 1997,
interviews were conducted annually. Since then, interviews have been biennial.
Information on these individuals and their descendants has been obtained through
various data collection efforts, which are described in more detail on the PSID website
(http://psidonline.isr.umich.edu/ ). I downloaded the full 2011 data from the website
and posted it under Sample Data.

Research question

The first thing you need to decide is your research question. One idea is to use an
income variable as your dependent variable (Household income, Head of Household
salary, etc.) and attempt to explain differences in income. In your research question, you
could focus on a particular aspect of potential observed differences in income and
formulate a testable hypothesis as your main focus. Here are some examples:

What is the return on a college education?
Do taller people make more money than shorter people?
Is geographic mobility associated with higher pay?
Does alcohol consumption increase/decrease income?


To help you find a research question, EconLit is the most comprehensive database, and
the best place to start. It contains almost all published research in economics since 1969.
National Bureau of Economic Research (NBER) Working Papers are also excellent. You
have access to these through the library website. There is a link to EconLit on this page:
http://cooklibrary.towson.edu/gateways/databases.cfm?alph=E

If you are having trouble coming up with a research question, please see me as soon as
possible.
Once youve decided on a research question, youll need to organize and modify your
data to get it ready for multiple regression analysis.

Organization of your final paper

Your final paper should consist of the following components:
Abstract
Introduction
Literature review
Economic model/Empirical methodology
Data description
Regression results
Conclusion
References/Bibliography
Appendices (Additional results, detailed data descriptions etc., if appropriate)

If you are new to the process of writing a research paper in economics, see below. Also,
a tremendous amount of material on writing in economics can be found on this website:
http://www.csus.edu/indiv/v/vangaasbeckk/resources/writing/comp.htm.

Abstract
The abstract is a short description and summary of your research paper. It will state
your research question, your theoretical and/or empirical analysis and findings, and
how your findings contribute to the existing literature and general understanding of the
economic problem you are addressing. All of this must happen in no more than 5-6
sentences! ***This is what people see first, but you really cant write it until you are
done, since it contains information about the results.***
Introduction
In the introduction you both identify and motivate your research question. The
introduction begins with a broad statement, and then narrows down to your specific
research question. An introduction should:

State your research question

Motivate why answering this questions is important to economists, policy makers, and
other stakeholders
Position your research within the existing literature
Identify your contribution to the existing literature and general understanding of the
subject/research question
Summarize how you intend to answer your research question
Summarize your results
The first paragraph should motivate why this research is important and relevant, and
should conclude with stating your research question as precisely as possible. The
second paragraph typically describes how you plan to answer your research question,
citing other work closely related to your own research. The next paragraph summarizes
your main findings.
Note: This is where you motivate your research and explain why this research should be of
interest to the reader, not why you are interested in it. It is not appropriate to include personal
anecdotes as a motivation. While you should be able to write the first paragraph when you begin
your research, the remainder of the introduction draws from and summarizes information
included and described in more detail in the other chapters. Often, authors combine the literature
review with the introduction, and you can do so as well.

Literature review

The literature review motivates why your research is important in the context of
existing research and demonstrates your understanding of the existing literature. Here
you can position your research and highlight your contribution in more detail.
Note: If someone has done a similar analysis to yours, explain what they have done, why you are
following their analysis, and how yours is different (e.g. you might be using different data and/or
additional variables, validate or generalize their findings, or question that their findings will
predict your specific case). In order to write a good literature review, you will have to conduct a
search of the existing research on your subject. I suggest you use ECONLit or other economic
search engines available through the library. One way to keep track of the literature as you
review it is to create an annotated bibliography (a document that includes both the
reference/citation and your notes to yourself about whats useful in the article). While you might
find lots of articles on one topic, its difficult to sort out which ones are relevant. Start by reading
the abstract, and critically read the articles that seem most relevant. In discussing and
summarizing the articles in your literature review, group them by common themes, and
summarize the aspects relevant to your topic only, not the entire paper. Finally, if you are using
someone else's work or ideas, even if you rewrite them, you must cite their original work. ***You
will never be punished for being unoriginal, but you WILL be punished for failing to give credit
where credit is due. If someone else came up with an idea, say so!***

Economic model/Econometric methodology

This part of your paper describes how you are analyzing your research question. State
your hypothesis and describe how you plan to test it. Define your dependent variable
and independent variables in your regression equation and justify why you are
including or not including certain variables in your analysis. Point to potential
estimation issues and say how you are addressing them. Finally, this section should
include the expected signs of your independent or explanatory variables.
Note: When justifying your regression equation and discussing the expected signs for your
estimated coefficients, you should make connections with your theory and literature review.
Also, make sure that your regression equation can answer your research question.

Data description

Here, you describe the data used in your analysis. This section should include:
Your primary source, number of observations in the data, data frequency, time period
covered, how the data were created, etc. (The amount of detail depends on the nature of
the data)
Any modifications and edits you made to the data to arrive at your final data set
Variable descriptions
Summary statistics for your final data set
Descriptive graphs such as histograms, scatter plots, etc.
Note: Think of the summary statistics and graphs as preliminary results. They give the reader a
better idea about your data and provide first suggestive evidence to test your hypotheses and
expected signs discussed in the previous section. In reporting this information, you should be
selective, and only report what conveys useful information, for instance, you need to decide how
to best represent your data graphically and which representations to include here.

Regression results & corrections

This section discusses in detail what you have found by doing your analysis. It usually
includes regression tables, and sometimes additional graphs and tables that summarize
and support these regression results. Your written discussion of your regression results
does not just repeat the information included in your tables. Instead, it interprets your
coefficients in light of your economic model and research question.
It also discusses the tests you ran on your regressions, and everything else you have
done to support and make your results more robust. That can include alternative
specifications you have tried, a discussion of how you addressed potential issues, and
how any identified issues potentially affect the validity of your results.

Note: The description of empirical results can seem a little foreign in the beginning, and there are
commonly used phrases and templates for doing so. The best way to familiarize yourself with
how to properly present and discuss your results is to look at other applied papers you cite in
your literature review.

Conclusion

The conclusion is somewhat similar to the introduction. It begins by restating your

research question, followed by what the current state of knowledge is regarding this
research based on the existing literature. Then it should summarize what you have
done, including a brief discussion of your results, limitations, and implications, as well
as highlighting your contribution to the existing literature. Offer the reader some
explanations for why, or why not, the results turned out the way they did. Have you
raised other interesting questions from doing this research? Or, is there something that
youd like to see another researcher do differently? Are there any weaknesses in the
analysis? You want to close by drawing implications such as policy implications or
recommendations and point to directions for further research or possible extensions.
Note: While parts of the conclusion are very similar to the introduction, be careful not to just
copy and paste here. While the introduction primarily motivates your research, the conclusion
primarily draws implications and discusses potential future directions. This is also the only part
of your paper where you can introduce normative statements, e.g. what should be done based
on your findings.

Bibliography/References

This section contains a complete list of references of all the works you cited in your
paper in APA style. It does NOT include the annotations from your Annotated
Bibliography, if you made one. As to style, I just need to know clearly whom you are
citing: I will not be taking points off for using a semicolon instead of a full colon, but if I
cant figure out how to find the source myself, you may lose points.

Please feel free to contact me with any questions: Im here to help!