Department of Economics

University of California - Davis

Winter 1997

Professor Colin Cameron

1147 Social Sciences and Humanities

Phone: 752-8396

email: accameron@ucdavis.edu

website: http://www.econ.ucdavis.edu/~cameron

**Meeting:**

Tues Thurs 1.40 - 3.00 p.m. 1150 Hart

**Office Hours:**

Tuesday afternoon 3.15 - 4.45 p.m.

Thursday morning 10.30 a.m. - noon

**Teaching Assistant:**

Edmund Snelling

115 Social Sciences and Humanities 754-8074 ersnelling@ucdavis.edu

**T.A. Discussion Sessions:**

Wednesday 6-7 pm and 7-8 pm (possibly change to 5-6 pm)

**T.A. Office Hours:**

Wednesday 2:10 - 4 p.m.

**Computer Lab:**

A computer orientation lab to be arranged early in the quarter.

**Course Goals:**

To understand and apply the linear regression model. This is the essential
statistical method used in Economics and many other disciplines to analyze
the relationship between two or more variables, such as income and level
of schooling, or inflation and money supply growth rates.

**Pre-requisites:**

Statistics 13, Math 16A-16B or 21A, Econ 100 or 104, and 101 or 105.

Statistics 13 is the most important. Algebra is extensively used, though
not matrix algebra. Some calculus will be used. Assignments will require
use of the computer.

**Course Outline:**

1. Introduction and Review

1 class Ch. 1 Introduction

3 classes Ch. 2 Review of Probability and Statistics

2. Two-Variable Linear Regression

6 classes Ch. 3 The Simple Linear Regression Model

3. Multiple Regression

3 classes Ch. 4 Multiple Regression Models

4. Extensions

1 class Chs. 5.1-5.5, 7.1-7.3 Functional Form and Indicator Variables

1 class Ch. 6 Multicollinearity

1 class Ch. 8 Heteroscedastic errors

1 class Ch. 9.1-9.4 Autocorrelated errors

**Textbook:**

R.Ramanathan, *Introductory Econometrics with Applications*, Dryden,
3rd ed. 1995.

**Additional Materials:**

On sale at Navins Copy Shop (231 Third) is: *Coursepack for Econometrics
140.*

This includes lecture notes covering the entire course, notes on how
to use the computer, past exams and solutions, and a reading.

The textbook has an especially good treatment of regression analysis (chapter 3 on). For the statistics review a Statistics 13 level textbook will be more helpful.

**Computer Materials:**

Assignments will use Excel on PC or MAC, and/or use Minitab on the
university mainframe computer EUCLID.

If you do not already have an EZ account run the account setup program
on a computer in one of the computer labs or at IT Information Express
in Shields library. Any questions call IT-CAP at 752-2548. It takes 1-2
days for a new account to be set up. You need to do this by middle of the
first week of class.

If you already have an account and have forgotten your password you
need to see IT Information Express in Shields library to get a new password.
It takes 24 hours for new password to take effect.

A computer lab will be held early in the course.

**Course Grading:**
**Assignments:** 20% 6 assignments. Due Thursdays Jan 16, 23; Feb
6, 13, 27, March 6.

Best 4 out of first 5, plus the sixth which is compulsory.
**Midterm exam 1:** 20% **Thursday Jan 30** Chs. 1-3
**Midterm exam 2:** 20% **Thursday Feb 20** Chs. 4
**Final** exam 40% **Wed March 19 8.00 - 10.00 a.m.** Chs. 1-9
(comprehensive)

**Assignments** must be handed in on time, so that solutions can
be discussed in class and distributed in a timely manner. No credit for
late assignments. Academic honesty is required.

**Exams** will be closed book. A formula sheet will be provided.
Note that the final exam is comprehensive.