Harvard Kennedy School of Government s1

HARVARD UNIVERSITY HARVARD KENNEDY SCHOOL OF GOVERNMENT

Course Syllabus for API-202 (Z-Section) Empirical Methods II Spring 2016

Class Time: Monday and Wednesday, 10:15-11:30am in LAND Z-Section Review Sessions: Friday, 1:15 - 2.30pm in HKS 1BA 401

Professor Amitabh Chandra Email: [email protected] Office Hours: Taubman 344, Monday 3-6pm To schedule an appointment please email Alexandra Kovalik

Faculty Assistant: Alexandra Kovalik ([email protected]) Teaching Fellow: Melissa Sands ([email protected]) Office Hours: Friday 2:30-3:30pm in computer lab

Course Assistants:Maurits Waardenburg ([email protected]) Audrey Baker ([email protected])

COURSE DESCRIPTION The purpose of this course is to equip students with the quantitative tools necessary to tackle issues that involve the empirical analysis of public policy problems of the sort they will encounter in a professional environment. Specifically, the course introduces students to the use of multiple regression analysis for analyzing data and evaluating social policy. The emphasis is on empirical applications. The course is designed with two objectives in mind. The first is to provide students with the ability to analyze critically the empirical analysis done by others at a level sufficient to make intelligent decisions about how to use that analysis in the design of public policy. The second is to provide students with the skills necessary to perform empirical policy analysis on their own or to participate on a team involved in such an empirical analysis. An important segment of the course focuses on program evaluation. This includes both the design and analysis of experiments that aim at measuring policy effectiveness and the use of non-experimental data to evaluate policy effectiveness. The Z section of API202 covers similar material as the other sections. The level of mathematical sophistication is, however, substantially higher, and because of the use of calculus allows the course to move through material quickly and cover more advanced topics. Students should enroll in the Z section instead if they prefer a more formal treatment of the material, or if they are interested in a more fluid discussion of the issues that arise in real-world program analysis. Assignments and exams differ between the Z section and the other sections, but there is a considerable degree of overlap.

PREREQUISITE FOR THE Z-SECTION Fluency with simple statistics, including hypothesis testing, at the level of API-201 (Section Z) is assumed. Calculus (derivatives and integration) will be used, and you are strongly discouraged from taking the Z section without fluency in basic calculus. The Z-section will also use the properties of the Expectations, Correlation, and Variance operators. Students with less than an A- in API 201 are not permitted to enroll in API 202 (Section Z). TEXTBOOK

Stock, J. and Watson, M., Introduction to Econometrics, 2nd edition, Addison-Wesley (2007) is a highly recommended reference. 10 copies are on reserve in the library. **Please note: you may also purchase the 3rd edition**

Nate Silver. The Signal and the Noise. Penguin 2015. We will read the first 7 chapters but you are free to read more.

GRADING

Problem Sets and quizzes: 20% Midterm Exam: 30% Final exercise: 10% Final Exam (Cumulative): 40%

Pursuant to HKS recommended grading practices, 10-15% of the grades will be an A, 20-25% will be an A-, 30-40% will be a B+, and 5-10% will be a B- or lower. All course activities, including class meetings, homework assignments, and exams are subject to the HKS Academic Code and Code of Conduct.

SWITCHING FROM Z-SECTION TO OTHER SECTIONS: On February 10th, you will be given a comprehensive diagnostic quiz (multiple choice) that will give you feedback on whether the Z-section is right for you. Scores will be returned to you quickly. You will then have a midterm on 2/29 that will be returned quickly. This return date is also the last date that you can switch into the non-Z sections. The School will not permit switching from the Z-section to the non-Z section after this date because it is disruptive to the other sections, and more difficult for students to catch up and succeed in the new section. If you switch over, we will send your homework grades to the section that you have switched over to. Your quiz grade in the Z section will not affect your performance in the non-Z sections because there is no corresponding quiz in those sections.

EXAMS The midterm and final will be closed book and closed notes. PROBLEM SETS 1) You are expected to turn in answers to the problem sets. Although problem sets will not be graded in detail, they will be corrected by the course assistants. Detailed answers will be posted on the course website for you to review. 2) To receive credit, problem sets must be submitted before the start of class on the day they are due. 3) The lowest problem set grade and lowest quiz grade will be dropped from the calculation of the overall problem set score. 4) You may work on the problem sets in small groups. You must, however, write up your answers individually, in your own words. Put the names of your study group member(s) on your problem set. Duplicate answers will receive no credit and will be subject to disciplinary review. 5) STATA, a statistical software package, is available both in the computer lab and from the CMO. CLASS PARTICIPATION AND ENGAGEMENT We strongly believe that student participation can substantially enrich the learning experience for both the students and the instructor. In this spirit, class participation is encouraged. Effective class participation requires that you read any assigned readings before coming to class. You are encouraged to ask questions, to share relevant insights you have from previous experiences, and to treat your classmates’ participation with courtesy. We only ask that questions and comments be brief and related to the topic at hand. Given that this is a large class, we will sometimes need to defer questions to a future class or office hours. Please do not bring food into the classroom. The use of computers, tablets, and phones is strongly discouraged even for taking notes. Checking email, Facebook and Twitter during class is not professional.

FINAL EXERCISE The final exercise will require you to applying some of the empirical methods learned in class to readings of empirical research on public policy. The topic will be announced after the midterm.

REGRADE POLICY To submit a re-grade request for an exam, submit the exam along with a clear statement of your concerns within two business days of the return of the graded exams. Your entire exam will be re- graded. Stock & Watson, Date Topic 2nd Edition Assignment 1/25 Observational studies, RCTs and causality 1, 1.3, 9.1, 9.2

1/27 Bivariate regression 4.1-4.6, 5.1-5.2 Silver, Chapter 1

2/1 Multiple regression 6.2-6.6, 7.1 Silver, Chapter 2

2/3 Dummy variables 5.3 PS1

2/8 Omitted variable bias 6.1, (9.2) Silver, Chapter 3

2/10 HRT Case Read case Quiz

2/15 HOLIDAY (President’s Day)

2/17 Interactions 8.1, 8.3, (8.4) Silver, Chapter 4

2/22 R2 and joint hypothesis testing 7.2, 7.5 PS2

2/24 Logarithms and Quadratics 8.1, 8.2, (8.4) Silver, Chapter 5

2/29 MIDTERM (in class)

3/2 Binary dependent variables 11.1-11.3

3/7 Binary dependent variables 11.1-11.3 Silver, Chapter 6

3/9 Field experiments PS3

3/14 HOLIDAY (Spring Break)

3/16 HOLIDAY (Spring Break)

3/21 Health Insurance Case Read Case Silver, Chapter 7

3/23 Fixed effects 13.2

3/28 Difference-in-differences 10.1-10.7 PS4 Instrumental variables + Introduction to final 3/30 13.1, 13.3 exercise 4/4 Instrumental variables 12.1-12.6

4/6 Regression Discontinuity 12.1-12.6 PS5

4/11 Advanced Topics Final exercise

5/6 FINAL EXAM (3-6pm) Cumulative