MSc Economic Policy Methods Seminar - Trinity … Seminar...MSc Economic Policy Methods Seminar MSc Economic Policy Methods Seminar Lecture 3: Assessing three papers Dr John McDonagh

MSc Economic Policy Methods Seminar

MSc Economic Policy Methods SeminarLecture 3: Assessing three papers

Dr John McDonagh

November 10, 2015


Table of contents

Introduction

Paper I

Paper II

Paper III


Introduction

Aims of today - general

I Look at three papers from each of your modules.

I Take some lessons on both methodology andpresentation for your own work.

I All three published so would have gone through a robustreferee process (see attached referee guide.)

I Hindsight can be great! New datasets and methodologiesdo become subsequently available.


Introduction

Three papers today

I Competition and regulation Grabowski, David C., andMichael A. Morrisey. ”Do higher gasoline taxes savelives?” Economics Letters 90.1 (2006): 51-55.

I Money banking Frain, John C. ”Inflation and moneygrowth: evidence from a multi-country dataset.” TheEconomic and Social Review 35.3 (2004): 251-266.

I Evaluation Mayor, Karen, et al. ”A Hedonic Analysis ofthe Value of Rail Transport in the Greater Dublin Area.”Journal of Transport Economics and Policy (JTEP) 46.2(2012): 239-261.


Introduction

Different types of economic papers.

I The key difference between different types of paper ishow they try to answer the research question.

1. Theoretical2. Empirical3. Theoretical + empirical


Introduction

Key questions for assessing empirical papers

1. Is the research question clearly set out? (Test: can Iexplain to a non-economist?)

2. Is the dataset fully described (including any weaknesses).

3. Are there any glaring econometric issues? An omittedvariable? Is reverse causality ignored etc..

4. Are the results adequately described? Readers shouldn’tbe left wondering “did they test for this, try this?”

5. Is the research question answered? Is the paper put incontext of the literature? Is future research set out?


Introduction

Recap on possible econometric problems - lecture 1

I Some of these are serious and cause bias:

I Reverse casualty.I Omitted variables.I Errors-in-variables.

I Others affect efficiency and can be handled moremechanically:

I Heteroskedasticity.I Autocorrelation.

I Others are a fact of economic life and have to be dealtwith as best we can:

I Multicollinearity (unless extreme)I Outliers in the data.


Introduction

Referee process does 1 to 5 and more


Paper I

Grabowski, David C., and Michael A. Morrisey.

”Do higher gasoline taxes save lives?” (2006)


Paper I

Empirical model


Paper I

Results summary


Paper I

Features on Paper 1

I Power of panel data and “unobserved heterogeneity.”

I Use of time dummies allows for “time specific” factors tobe controlled for.

I Importance of capturing omitted variables (even in paneldata).

I Short and concise paper.

I Placing results in the context of the existing literature;comparing results to other studies. drawing policyconclusions.

I Heteroskedasticity can be controlled for mechanically.


Paper I

Thoughts on Paper 1

I Endogeniety? Why might this be an issue? Subsequentpapers have used instruments for prices (Burke andNishitateno, 2014).

I Dependent variable: fatalities vs crashes?

I Timing issues: do we expect taxes to have an immediateimpact on driver behaviour? Lagged effects?

I Is omitting two states the best?

I Subsequent papers have looked at international data; alsomore micro approaches, eg are age, gender, raceimportant?

I Graphs are useful.


Paper II

Frain, John C. ”Inflation and money growth:

evidence from a multi-country dataset.” (2004)


Paper II

Empirical model


Paper II

Sample of Results


Paper II

Features on paper 2

I Well-motivated research question: challenges DeGrauwe’s view. Based on a simple economic model(MV=PY). A Structural approach.

I Up front on limitations: doesn’t check for casualty orshort-run economic impacts.

I Quality of data can impact on empirical work.

I Use of recursive estimates checks sensitivity of the βestimates to sample.

I Results placed in the context of the existing literature.


Paper II

Comments on paper 2

I Causality is not tested: M ⇒ π or π ⇒ M?

I Short-run responses not estimated.

I Time series methods are available (in Stata) to exploreboth.

I Classic time series problems. Check R2


Paper III

Mayor, Karen, et al. ”A Hedonic Analysis of the

Value of Rail Transport in the Greater Dublin

Area.” (2012)


Paper III

Paper 2: selected results


Paper III

Features on paper 3

I There are conceptual problems with the Hedonic pricingapproach; let’s focus on the econometrics.

I Array of variables to address omitted variable concerns.

I Power of dummy variables.

I Growing importance of GIS methods.

I Applying US dominated literature to Ireland.

I Recognises criticism of this literature.


Paper III

Comments on paper 3

I Multicollinearity, eg what if larger properties are onlyavailable in cleaner non-polluted areas?

I Endoengienty. Think about the “price” of peace andquiet? Use of instruments.

I What if the housing market was not in equilibrium in thisperiod?

I The coefficient estimates are often not robust to changesin the model’s specification eg if we move from linear tonon-linear models.


Paper III

Useful references

I McCloskey, Deirdre N. Economical Writing. 2nd ed. LongGrove, Ill.: Waveland Press, 2000

I Miller, Jane E. The Chicago Guide to Writing aboutMultivariate Analysis. Chicago: University of ChicagoPress, 2005.

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MSc Economic Policy Methods Seminar - Trinity … Seminar...MSc Economic Policy Methods Seminar MSc Economic Policy Methods Seminar Lecture 3: Assessing three papers Dr John McDonagh