Course Description

Course Name

Empirical Microeconomics

Session: VSOF3221

Hours & Credits

3 Credits

Prerequisites & Language Level

Taught In English

  • There is no language prerequisite for courses at this language level.

Overview

Learning Objectives
This course intends to provide students with experience in empirical analyses of topics in social science. Students learn the key empirical strategies that contemporary researchers use, explore selected research papers in applied microeconomics, analyze data on individuals using statistical software, and possibly start conducting research of their own. A major theme is how to distinguish causality from correlation using observational data. The lecture will be delivered in English, but knowledge in Korean is mandatory as many available data sets are not provided
in English. Students are allowed to use Korean in class and in exams.

Prerequisites
Basic mathematics and statistics courses, such as ECON 205 and ECON 206, are mandatory.
Econometrics I is recommended, but is not required.
Students may take Econometrics I or II during the same semester.

Course Description
This course consists of formal presentation of the most commonly used empirical strategies and their applications to real world examples with an emphasis on how to distinguish causality from correlation using individual-level nonexperimental data.

Below is an example. In labor economics, we learn that individuals go to school to gain human capital which may be exchanged for wages in the labor market. In addition, individuals accumulate human capital while they are working in the labor market.
1. This is the human capital theory which explains wages as a function of schooling and experience. How do we know this hypothesis actually holds in real world?
2. We may interview individuals and collect data on schooling, experience, and wages.
3. Then, it is possible to learn about the wage function by analyzing the collected data.
Suppose that more educated individuals are observed to earn higher wages than less educated ones on average holding labor market experience constant.
4. Can we conclude that schooling raises wages?
Letís discuss the above four steps. Step 1 identiÖes which research question to examine. These questions may be based on economic theory or sometimes on intuition. Step 2 is about data. We will mostly use publicly available data sets. The key to Step 3 is how to use econometric methods in a proper way. Once we have clear understanding about these methods, estimation can be done by a few lines of codes using statistical software. Step 4 interprets the estimation results from the standpoint of the research question in Step 1. Imprecisely designed analyses end up
with incorrect conclusion. For example, suppose that we compare initial wages of high school graduates and college graduates. It is possible that more productive individuals choose to go to college and would do better in the labor market even in the absence of college education. How do we rule out this possibility and come up with a causal relationship between schooling and wages? These four steps will be covered in this class with an emphasis on Steps 3 and 4.

*Course content subject to change