Department of Economics (Spring 2025)

EC203 A1 Empirical Economics 1 (T,Th 12:30-1:45, CAS 211)

Course Description:  This is an introductory level course in empirical analysis, i.e.  applied statistics for economists.  The purpose of the course is to gain an understanding of the uses and limitations of statistical methods as applied to a wide range of economic phenomena and policies, and to train students to use data to investigate economic questions.  The first part of the course introduces descriptive statistics, and provides a foundation in probability and distribution theory.  The second part of the course discusses random variables and the distributions of random variables.  The third part of the course discusses statistical inference, e.g., hypothesis testing, confidence intervals, goodness-of-fit tests, and basic regression analysis.  The topics covered in this course provide the foundation required to successfully complete EC 204:  Empirical Economics II which will focus on applied econometrics.

Hub Learning Outcomes:  This class fulfills the Quantitative Reasoning I Hub Capacity.  Students will be provided with an introduction to statistics, beginning with descriptive statistical analysis though basic regression analysis.  Throughout the class students will be taught how to use an econometrics software package (Stata) in the context of each statistical concept on the syllabus, and to the extent possible, in the context of economics-related empirical research questions.  Our goal is to provide students with the tools needed both to perform. statistical analysis of their own, and to be critical consumers of reported statistical evidence, i.e. concept of endogeneity, causality, omitted variables biases appear at different levels of sophistication throughout the sequence.

Department Outcomes: Within the economics department, EC203 is half of a full-year empirical analysis sequence in economics, the other half being EC204.  These classes are part of the core EC200 level courses in both the major and minor, the other two being Intermediate Microeconomics (EC201), and Intermediate Macroeconomics (EC202), and provide the foundations for upper level electives.

Prerequisites:  EC101 Introductory Microeconomic Analysis and EC102 Introductory Macroeconomic Analysis.  This course, or an approved alternative, must be completed before taking EC203. Students who have taken MA115 or the equivalent are placed out of EC203.

Course Web Site:  All course documents and announcements will be posted on the course site, which can be accessed at https://learn.bu.edu/.

Textbook:  Essentials of Statistics for Business and Economics, Anderson, Sweeney, Williams, Camm and Cochran (ASW), 10^th edition, South-Western Cengage Learning.  The textbook will be available through an electronic purchase through the B&N First Day program, which is much less expensive than buying a paper copy. You can access the text by clicking on the “Course Materials (B&N First Day)” tab.

Software: Students are required to use the econometric software package Stata.  It can be purchased online at Buy Stata | Student single-user purchases (educational).  For the class I suggest that you purchase Stata/BE. You can purchase and annual license for approximately $94 or a perpetual license for approximately $225. You will also be using Stata in EC204.  We will start using Stata right away, so students should be sure to buy their copy of Stata within the first week of class.

Problem Sets:  The problem sets are posted on the course site in the Problem Set Schedule document in the Assignments folder (separate files with the assigned problems are also posted in the Assignments folder as are the needed data files).  Students may discuss the problems with each other, but everyone must hand in their own work.  You must hand in your problem sets to your TA in the discussion session you are registered in (do not email attachments unless you first get permission to do so from your TA). Your TA will use the discussion session to go through the assigned problems.

Discussion Sections:  These weekly sessions are an integral part of the course.  They are run by a teaching fellow, an advanced graduate student in the economics Ph.D. program at BU.  During these meeting your TA will go over the assigned problem sets, answer questions about Stata.  Contact information for the TAs will be posted in the document “Discussion Session Information” under Assignments.  Please be sure that you have registered for a discussion session associated with this lecture (i.e., A1, A2, A3). Discussion sessions will begin the second week of classes. Attendance will be taken in discussion sessions and repeated lack of attendance may have an adverse effect on your course grade.

Teaching Assistant: Qianye (Miranda) Xi ([email protected]). Office hours will be posted on the Blackboard course site.

Exams:  All exams are based on questions drawn from material covered in the text, lectures, and problem sets.  In other words, all material associated with the course may appear on exams, including lecture material that is not in the text, so students should maintain a good set of class notes.

Calculators: For exams students may only use calculators with no more than a two line display screen (larger screens have in the past been associated with student malfeasance on exams).  Cell phones may not be used. Be sure that your calculator has a key such as x^y. A simple calculator of this sort may be purchased for about $10.

Makeup Exams: There will be no makeup exams for the two midterms.  If you miss a midterm due to a medical emergency, then the points for that midterm will be added to your final exam.  Also, please note that under no circumstances will the final exam or midterms be administered on a different date than scheduled because of travel plans or family events (if, though, there is a family medical crisis, you should contact me about this and I may approve shifting points for a midterm to your final exam).  Any changes to an announced exam date, time, or place will be announced in class and posted on the course website (emails will also be sent to the class, but if your mailbox is full you may not get the email).  It is the responsibility of the student to be aware of these changes.  

Grades:  Course grades will be based on ten problem sets (1 point each, for a total of 10 points), two midterm exams (20 points each), which are not cumulative, and a cumulative final exam (40 points) which may include any material covered in the course during the entire semester and does not necessarily focus predominantly on the material from the last third of the course.   If a student scores higher on the final exam than on a midterm, that midterm grade will only count for 10 points and the final exam will count for the additional points.  Your final grade will be based on a curve reflecting the Final Course Score, with the median score receiving a grade of B.  I will not, therefore, assign letter grades to your midterm exam scores, but since the score distribution and the associated median score will be posted for each midterm exam you can have a reasonably good idea how well you are doing in the course.

Attendance:  Attendance in lectures (and discussion sessions) is mandatory and repeated absences may affect you course grade. If you miss class you are responsible for getting lecture notes from your classmates.  The structure of knowledge in economics is strongly hierarchic in that each successive lecture tends to build on prior material in a rather systematic fashion.  As such it is very easy to fall behind if you miss a class and do not study the missed material before the subsequent lecture.

Important Administrative Dates: Tuesday, 1/21 – first lecture

Tuesday, 2/18 – substitute Monday Schedule (no lecture)

*** Spring Recess 3/8-3/16 ***

Thursday, 5/1  – last lecture

Students with Documented Disabilities: If you have a disability that necessitates extra time for exams, or any other accommodations, you will need to email me a letter from the BU office of Disabilities Services at least two weeks before the first midterm so that I can make arrangements.

Policy on Cheating:  Cheating on exams will result in a zero grade for that exam (and this grade will fully count in the final course grade calculation regardless of the grade on the final) and will be reported to the Dean’s office.  In this regard it is important to remind everyone that students are responsible to know and understand the provisions of the CAS Academic Conduct Code which can be located at the URL  https://www.bu.edu/academics/policies/academic-conduct-code/

Course Outline 

I.  Data & Statistics - Chapter 1

II. Summarizing Quantitative Data - Chapter 2

III. Descriptive Statistics - Chapter 3

IV. Probability - Chapter 4

 Midterm #1: Tuesday 2/25 (chapters 1-4)

V. Discrete Probability Distribution - Chapter 5, delete Section 5.4

VI. Continuous Probability Distribution - Chapter 6, delete Section 6.3

VII. Sampling and Sampling Distribution - Chapter 7

VIII. Interval Estimation - Chapter 8

Midterm #2: Tuesday 4/1 (chapter 5-8)

IX. Hypothesis Testing - Chapter 9, Sections 9.1-9.5

X. Inferences About Means and Proportions with Two Populations - Chapter 10

XI. Comparing Multiple Proportions - Chapter 12

XII. Experimental Design and ANOVA - Chapter 13, Sections 13.1-13.3

XII. Simple Linear Regression – Chapter 14, Sections 14.1-14.5