Assignment Remit

Module Learning Outcomes:

This assignment is designed to assess the following module learning outcomes. Your submission will be marked using the Grading Criteria given in the section below.

LO1. Demonstrate rigorous knowledge of econometric methods.

LO2. Identify the most appropriate techniques for any given empirical exercise. LO3. Interpret empirical results from economic models.

General information

This coursework accounts for 50% of your final mark.

The coursework is an individual piece of work. You are required to write your own answers and cannot work jointly. All submissions will be routinely checked for plagiarism. [Plagiarism Policy]

The deadline for the submission of the coursework is 28 Nov 2024 by 12:00:00 (12 noon).

The coursework must be submitted via Canvas in pdf format. The coursework should not be longer than 1,500 words.

Figures, tables and references do not count towards the word limit.

Copying and pasting Stata output (except for graphs and figures) is not acceptable. You should create properly formatted tables.

Equations count towards the word limit.

You may draw on the existing literature to support your discussion. Any external sources consulted for this project should be referenced correctly.

An Appendix should be attached at the end of each part of the essay that will contain the Stata commands used to obtain the results. The Appendix does not count towards the word limit.

How to dowell

•           Perform. the appropriate quantitative analysis. Investigate the structure of your data set and think carefully which methodology and which variables you are going to use.

•           Perform. statistical tests to support your results and empirical approach if needed.

•           You might use tables and graphs to develop and justify your empirical strategy.

•           Present your tables clearly, provide a detailed and thorough analysis of all the

findings (without going over the word limit) and discuss whether they are precise or not.

•           Submit a well organised and detailed Stata code.

•           Submit a piece of work that is well written, with no typographical or grammatical mistakes, well organised and well formatted.

Assignment

In this coursework we are interested in investigating (A) the economic benefits gained from  educational attainment and (B) the relationship between oil prices and stock markets. For Part A you should use the data set nlsy.dta and for Part B you should download the required data from a suitable data portal. Please answer both questions below and enclose your Stata do-files with comments.

A. Returns to Educational Investment. [50% - 750 words]

Thenlsy.dta dataset contains data from the National Longitudinal Survey of Youth for a particular year. Develop an empirical strategy to estimate the returns to education for individuals in this sample. Explain and justify your strategy carefully, then implement the strategy. Test whether there is any difference in the returns to education by gender, and by race. Present tables with your results and discuss your findings and any limitations of this analysis.

B. Modelling Stock Markets. [50% - 750 words]

This part of the empirical project aims to develop a modelling strategy for stock markets returns, either for a single country/sector (using time series econometrics methods) or for multiple countries/sectors (using panel data econometrics methods).

The project will involve downloading relevant data on stock markets prices and any other covariates (macroeconomic variables, sentiment indexes, oil prices, sector-specific variables) that you believe will be needed for a correctly specified model.

You will then apply appropriate econometric techniques to analyse the relationship between thesecovariates and stock market performance, drawing conclusions supported by your empirical findings.

Coursework structure

For each part of the project, you should write a well-structured report that includes the sections listed below. You can allocate the word count (750 words) among these sections in the way you find most appropriate.

Part A [750 words]

1. Introduction

•    Explain the importance of understanding how education impacts individual returns and outcomes.

•    Briefly highlight the key foundational studies in the literature related to this topic.

•   Clearly outline the objectives of your study and the specific research questions you intend to explore.

2. Data and Methodology

•    Briefly describe the data source and variables used in your study.

•   Carefully explain and justify your empirical strategy, including model specifications and estimation procedures.

3. Empirical Results

•    Present and interpret the results of your empirical analysis.

4. Discussion

•    Discuss any limitations (if applicable) of your research and propose potential strategies to overcome them.

5. References

•    Provide a comprehensive list of all sources cited in your report. References do not count towards the word limit.

6. Appendix

•    Provide the Stata commands used to obtain the results. The Appendix does not count towards the word limit.

Part B [750 words]

1. Introduction

•    Provide background on the importance of understanding the relationship between oil prices and stock markets.

•    Briefly highlight the key foundational studies in the literature related to this topic.

•   Clearly outline the objectives of your study and the specific research questions you intend to explore.

2. Data and Methodology

•    Describe the data sources, variables, and time period of your study.

•    Explain the econometric techniques you will employ, including model specifications and estimation procedures.

3. Empirical Results

•    Present and interpret the results of your empirical analysis.

4. Discussion

•    Discuss any limitations (if applicable) of your research and propose potential strategies to overcome them.

5. References

•    Provide a comprehensive list of all sources cited in your report. References do not count towards the word limit.

6. Appendix

•    Provide the Stata commands used to obtain the results. The Appendix does not count towards the word limit.

The final report (part A + part B) should be approximately 1,500 words in total (excluding tables, figures, and references) and adhere to a professional academic writing style. with appropriate citations and formatting (e.g., APA, Harvard).

Grading Criteria / Marking Rubric

Your submission will be graded according to the following criteria:

•   Content: Demonstrate an understanding of econometric concepts and

methodologies, apply econometric techniques appropriately, present a comprehensive analysis of economic and financial data, and draw logical conclusions based on evidence. (75% weight)

•    Form. Ability to produce a well-written and presented essay. This involves paying particular attention to the essay’s structure and organisation, writing style, citation style, and grammar. (25% weight)