Annoucements:

None.

Problem Sets:

Here is the data for Problem Set 2.

Here is the data for Problem Set 1.

Here is the updated do-file with all of the answers for Problem set 1.

Here is the do-file with all of the answers for Problem set 2.

In the problem session Friday, Steve also mentioned that it might be helpful to get yourself a copy of EditPlus. If you do, don't forget to download the Stata sytax file on this page.

Meetings:

The course will meet Mondays and Wednesdays from 9:00-10:20 p.m. in RO 301.

Requirements:

The main course requirement is to write a paper containing original research that has the potential to be a contribution to knowledge and potentially a precursor to the second-year paper requirement and/or a dissertation chapter. A five page discussion of the idea, model, methods, and data (where applicable) will be due at the conclusion of the term. A completed paper will be due sometime later, as allowed by school policy. Students will have the opportunity to present preliminary work towards the end of the course.

There will be two to three empirical problem sets designed to get you working with data. In addition, students will have the option of writing one referee report on a paper and making a brief presentation of the conclusions in front of the class. This is meant to get you thinking actively and critically about research.

For most of you, there is absolutely no reason to take this course for credit. Anyone who wants to sit in the course, but doesn’t want to write a paper to fulfill the requirements is welcome. Indeed, I encourage you not to take the course for credit unless you can think of a good reason for doing so.

Seminars:

Seminar attendance plays an important part in raising current issues being debated in the field, permitting students to meet some of the outstanding scholars in the field, and providing students with a chance to compare their views on a paper to those of a wide range of faculty. There are two seminars that are particularly relevant to the material in this course, although other seminars may also be valuable. The first is the Applications workshop held on Monday afternoons. The second is an Applied Economics workshop held in the GSB on Wednesdays. I strongly encourage you to attend these seminars regularly.

Another activity that you might find very useful in your education is the informal Friday empirical lunch workshop sponsored by the department. These hour long lunches (12:30-1:30 on Friday in RO 329) allow students the chance to present work-in-progress in a more informal, less pressure-filled environment. Everyone is welcome. Pizza is served. If you don’t go to any other seminars, go to these.

Textbooks/Reading Materials:

There is no textbook. Everything covered in this class will be based on articles. I’ve set up this webpage so you can download electronic versions of almost all of the papers on the reading list.

Problem Sets:

Over the course of the term there will be two to three problem sets. For each of the problem sets, I’ll give you some data and some guidance for exploring the data. The goals of these problem sets are to familiarize you with STATA (the statistical software of choice for most people) and give you some practice at manipulating, interpreting, and presenting empirical findings. Kris Hult, a STATA expert, will lead the discussion of the problem sets.

Lectures:

Material to be covered in the course, as well as an approximate schedule, is listed below. What is presented below should be viewed only as a rough guide to the course material and the timing of lectures is likely to get off-track at some point. The strategy of this course is to present a range of papers – some good, some bad – in attempting to isolate what makes an economics paper (un)successful.

An asterisk next to a paper means that I am likely to talk about the paper in class; the other papers are there as resources for you.

Lectures 1-3: Paper writing 101 (January 7-14)

Readings:

*Marion, Justin, and Erich Muehlegger, 2007, “Measuring Illegal Activity and the Effects of Regulatory Innovation: A Study of Diesel Fuel Tax Evasion,” Forthcoming, Journal of Political Economy.

Hsieh, Chang-Tai, and Enrico Moretti, “Can Free Entry be Inefficient? Fixed Commisions and Social Waste in the Real Estate Industry,” Journal of Political Economy 2003.

Dixit, Avinash, “My System of Work (Not!),” American Economist v38, n1 (Spring 1994): 10-16. Download

Hamermesh, Daniel, “The Craft of Labormetrics,” Industrial and Labor Relations Review v53, n3 (April 2000): 363-80 Download

A GREAT BOOK IF YOU'RE STRUGGLING FOR IDEAS:

Von Oech, Roger, A Whack on the Side of the Head : How You Can Be More Creative (December 1998), Warner Books. (NOT IN PACKET, but a great book if you are struggling for ideas)

Lectures 4-5: Be the first to tackle a problem (January 16-23)

Readings:

*Brown, Jeffrey and Austan Goolsbee, “Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry,” Journal of Political Economy, June 2002, 110(3), pp. 481-507. Download

*Oster, Emily "Hepatitis B and the Case of the Missing Women", Forthcoming Journal of Political Economy. Download

*Almond Douglas "Is the 1918 Influenza Pandemic Over? Long-term Effects of In Utero Influenza Exposure in the Post-1940 U.S. Population", NBER working paper. Download

*Donohue, John and Steven Levitt, “The Impact of Legalized Abortion on Crime,” Quarterly Journal of Economics, v116, n2 (May 2001): 379-420. Download

Knowles, John, Nicola Persico, and Petra Todd, “Racial Bias in Motor Vehicle Searches: Theory and Evidence,” Journal of Political Economy 109 (February 2001):203-229. Download

Gruber, Jonathan, 1994, “The Incidence of Mandated Maternity Benefits,” American Economic Review,84: 622-41. Download

Lectures 6: Fix a literature that is broken (January 28)

Readings:

*Duggan, Mark, “More Guns, More Crime,” Journal of Political Economy, 109 (October 2001): 1086-1114. Download

*Friedberg, Leora, 1998, “Did Unilateral Divorce Raise Divorce Rates? Evidence from Panel Data,” American Economic Review 88:608-627. Download

Levitt, Steven, "Using Repeat Challengers to Estimate the Effect of Campaign Spending on Election Outcomes in the U.S. House." 1994. Journal of Political Economy 102:777-798. Download

Problem set #1 discussion (End of January, time to be determined)

Lectures 7-8: Find new data (January 30-February 4)

Readings:

*Jensen, Robert, 2007, “The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector,”Quarterly Journal of Economics, August 2007, 122: 879-924.

*Sorensen, Alan, “Equilibrium Price Dispersion in Retail Markets for Prescription Drugs,”Journal of Political Economy v108, n4 (August 2000): 833-50. Download

*Miron, Jeff, 2003, “Do Prohibitions Raise Prices? Evidence from the Market for Cocaine,” Review of Economics and Statistics, August 2003, 85(3), 522-530. Download

*Levitt, Steven, 2006, “An Economist Sells Bagels: A Case Study in Profit Maximization,” NBER WP No. 12152, 2006.

McMillan, John, and Pablo Zoido, 2004, “How to Subvert Democracy: Montesinos in Peru,” Journal of Economic Perspectives 18 (4), Fall 2004, 69-92. Download

Ayres, Ian, and Steven Levitt, “Measuring Positive Externalities from Unobservable Victim Precaution: An Empirical Analysis of Lojack.” 1998. Quarterly Journal of Economics 113(1): 43-77. Download

Karpoff, Jonathan, 2001, “Public versus Private Initiative in Arctic Exploration: The Effects of Incentives and Organizational Structure,” Journal of Political Economy 109:38-78. Download

Baker, George, Gibbs, Michael, and Bengt Holmstrom, “The Internal Economics of the Firm: Evidence from Personnel Data,” Quarterly Journal of Economics v109, n4 (November 1994): 881-919. Download

Wagner, Mathis, 2007, “Native Worker Responses to Immigration and Their Labor Market Consequences,” Unpublished manuscript, University of Chicago.

Lectures 9-10: New and better sources of identification (February 6-11)

Readings:

*Hoxby, Caroline, “Does Competition among Public Schools Benefit Students and Taxpayers,” American Economic Review, v90, n5 (December 2000): 1209-38. Download

*Rothstein, Jesse, "Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)." Forthcoming, American Economic Review. Download

*Hoxby, Caroline, "Competition amoung public schools: A reply to Rothstein (2004)", NBER working paper #11216. Download

*Kunce, Mitch, Shelby Gerking, and William Morgan, 2002, “Effects of Environmental and Land Use Regulation in the Oil and Gas Industry using the Wyoming Checkerboard as an Experimental Design,” American Economic Review pp.1588-1593. (Also see retraction of this paper: Gerking and Morgan, 2007, American Economic Review 97:1092.)

Greenstone, Michael and Kenneth Clay, 2004, “Does Air Quality Matter? Evidence from the Housing Market,” Unpublished manuscript, University of Chicago.

Sloan J. et al., 1988, “Handgun Regulations, Crime, Assaults, and Homicide a Tale of 2 Cities, New England Journal of Medicine 319: (19) 1256-1262 Nov 10.

Angrist, Joshua, and Alan Krueger, “Does Compulsory School Attendance Affect Schooling and Earnings?,” Quarterly Journal of Economics v106, n4 (November 1991): 979-1014. Download

And also on this topic:

Angrist, Joshua, and Alan Krueger, “Empirical Strategies in Labor Economics,” Handbook of Labor Economics.

Rosenzweig, Mark and Wolpin, Kenneth, “Natural ‘Natural Experiments’ in Economics,” Journal of Economic Literature v38, n4 (December 2000): 827-74. Download

Lectures 11-13: Lab and field experiments (February 13-20)

Readings:

*List, John, 2005, "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions". NBER, working paper, 11616. Download

*List, John, 2006, “Dictator Game Giving is an Experimental Artifact,” Forthcoming, Journal of Political Economy.

*Jensen, Robert, and Nolan Miller, 2007, “Giffen Behavior: Theory and Evidence” NBER WP 13243.

*Palacios-Huerta, Ignacio, and Oscar Volij, “Experientia Docet: Professionals Play Minimax in Laboratory Experiments,” Unpublished manuscript.

Gintis, Herb, Joseph Henrich, Robert Boyd, Samuel Bowles, Colin Camerer, Ernst Fehr, and Richard McElreath, 2001, “In Search of Homo Economicus: Behavioral Experiments in 15 Small Scale Societies,” American Economic Review v91, n2 (May 2001): 73-78. Download

List, John, and Steven Levitt, 2006, “What do Laboratory Experiments Tell us about the Real World?” Unpublished manuscript. Download

Krueger, Alan, 1997, “Experimental Estimates of Education Production Functions,” Quarterly Journal of Economics v114, n2 (May 1999): 497-532. Download

Lectures 14-15: Integrate theory and empirics (Non-structural) (February 25-27)

Readings:

*Bresnahan Timothy and Peter Reiss, 1991, “Entry and Competition in Concentrated Markets,” Journal of Political Economy 99 (October): 977-1009. Download

*Shepard, Andrea, 1991, “Price Discrimination and Retail Configuration Source,” Journal of Political Economy 99 (February): 30-53. Download

*Chiappori, Pierre-Andre, Steven Levitt, and Timothy Groseclose, 2001, “Testing Mixed Strategy Equilibria using Soccer Penalty Kicks,” American Economic Review, v92 (September 2002): 1138-1151. Download

McCormick, Robert and Robert Tollison, “Crime on the Court,” Journal of Political Economy, vol. 92, 1984, pp.223-235. Download

Problem set #2 discussion (Sometime end of February)

Lectures 16: Integrate theory and empirics (Structural) (March 3)

Readings:

*Pakes, Ariel, 1986, “Patents as Options: Some Estimates of the Value of Holding European Patent Stocks,” Econometrica 54:755-84. Download

*Hortacsu, Ali, and Steven Puller, “Understanding Strategic Bidding in Multi-Unit Auctions: A Case Study of the Texas Electricity Spot Market,” Unpublished manuscript.

Cameron, Stephen and Taber, Christopher , 2004. "Estimation of Educational Borrowing Constraints Using Returns to Schooling," Journal of Political Economy vol. 112(1), pages 132-182. Download

Haile, Philip, and Elie Tamer, 2003, “Inference with an Incomplete Model of English Auctions,” Journal of Political Economy,111 (1), February 2003, 1-51. Download

Petrin, Amil, “Estimating the Consumer Surplus and Welfare Gains from the Introduction of Minivans,” Journal of Political Economy , 110:705-729, 2002. Download

Lectures 17-18: Student presentations of paper ideas and initial research (March 5-10)