Mastering 'Metrics: The Path from Cause to Effect

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Ideal for students, ideal for older economists who privately admit they could do with brushing up their econometric knowledge a bit, as they look at the figures generated by their software packages. Yet they get no attention in Studenmund (2011) or Gujarati and Porter (2010), while Hill, Griffiths, and Lim (2011) and Wooldridge (2012) briefly attend to differences-in-differences only.

Becker, WE, and WH Greene (2001), “Teaching Statistics and Econometrics to Undergraduates”, Journal of Economic Perspectives, 169-182. Our views are necessarily colored by the areas of applied microeconomics in which we are active, but we look over the fence at other areas as well.It is found that students receive 9% higher earnings from going to a private university based on a simple regression methodology. There is also an effort at comparison of various techniques and lingering of the IV-2SLS; but I feel either the comparison should have flowed through the entire book, or should have been chapterized separately.

Written by true ‘masters of ‘metrics,’ this book is perfect for those who wish to study this important subject.The winds of change have blown most strongly in applied microeconomics, but econometrics has been left far behind. Our regression discussion begins by challenging readers to ask themselves, first, what the target causal effect is, and, second, by asking, ‘what is the regression you want’? Core economic questions are mentioned in passing if at all, and empirical examples are still mostly contrived, as in Studenmund (2011), who introduces empirical regression with a fanciful analysis of the relationship between height and weight.