
Writing Assignment (Paper) Instructions



Goal: To perform an
empirical econometric study.

Reward: 10% of your course grade.

Data
Source:
T. Mamuneas, A. Savvides and T. Stengos, "Economic Development and the
Return
to Human Capital: A Smooth Coefficient Semiparametric Approach", Journal of Applied Econometrics, Vol.
21, No. 1, 2006, pp. 111132.
Annual
data for 51 countries for 1985; one row of the data corresponds to one
year for one country.

Variable
Names and Descriptions
Name

Description
(Details
in Appendix A of the paper (PDF) )

ID

Country ID

Y

Output

K

Physical capital stock

L

Labor

H

Human capital stock

INV

Investment

SLADJ

Output share of labor

SHAREHK

Share of human capital in adjusted output share
of labor

PPP

Purchasing Power Parity relative to the US.

XR

Nominal exchange rate (units of domestic
currency per one US dollar)

POLITICAL

Index of political freedom (1  6), where 1=
Most freedom, 6 =Least freedom,
the rest is
inbetween.

CIVIL

Index of civil freedom (1 7), where 1= Most
freedom, 7 =Least freedom,
the rest is
inbetween.

OPEN

Dummy variable: 1=
country's trade regime is classified as open and
0= country's trade
regime is classified as closed

HIGH

Dummy variable equals 1 if country is high
income, 0 if not.

MIDDLE

Dummy variable equals 1 if country is middle
income, 0 if not.

LATIN

Dummy variable equals 1 if country is in Latin
America, 0 if not.

SSAFRICA

Dummy variable equals 1 if country is in Sub
Saharan Africa, 0 if not.

SEASIA

Dummy variable equals 1 if country is in South
East Asia, 0 if not.


Data: STATA Data file,
or Excel 
Format:
1. The paper should be between 5 and 9 pages plus cover
page. The cover page should contain appropriate
title for the paper and the name
of the author. The relevant STATA
output should be included in the text.
2. The paper should be submitted in electronic form (MS Word)
via Blackboard.
The paper can be
submitted ONLY via Blackboard.
As
usual you can work together and consult
with other students but you must write your
own paper.
I
will use the BB Safe Assignment to check for plagiarism.
3. Check Section 4.6 of the Wooldridge book for the
reporting of the regression results.

Due Date: The paper is due by noon
the last
day of classes.
No extension of the
deadline.

What to include in the paper:
1. Define your main research
question(s) by using your knowledge from economic theory classes.
2. Clearly define your dependent/outcome variable and 3 to
5 independent variables. One of the independent
variables must be dummy/indicator
variable.
3. Formulate a hypothesis about the relationship between
the dependent variable and the independent variables.
4. Describe the data, plot the data, use descriptive
statistics for this analysis.
5. Perform simple bivariate analysis, e.g. correlation
matrix, scatterplot, discuss functional form, etc.
6. Build a multiple regression model and estimate its
coefficients. Answer the questions about the statistical
significance of the whole model,
each of the slope coefficients, and how good the model is, e.g. the
proportion
of explained variance.
7. Interpret the regression coefficients.
8. Conduct the necessary hypothesis tests. Include at
least one hypothesis test for general linear restrictions of two
or more (but not all) slope coefficients.
9. Conclude and discuss the implications of your findings.

Good Luck!




