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This is the study programme for 2019/2020. It is subject to change.


In most of economics, marketing and business management, we are interested in causal relations between variables, rather than mere correlations. For example, it is not the correlation between marketing expenses and sales that is of interest, but the effect of increasing marketing expenses for a product on the sale volume of the same product. In this course, we study methods for estimating and identifying such causal effects. First, the course provides a short review of basic regression techniques. Second, we introduce the topic of causal analysis. In the third part of the course, we discuss randomized experiments as the predominant way for establishing causality. Last, we use the potential outcomes framework to discuss designs and methods for data from observational studies. In particular, designs and methods covered include instrumental variables, difference-in-difference, regression discontinuity design, and synthetic control methods.

Learning outcome

Knowledge
The course introduces causal analysis and teaches PhD students how to apply these methods to actual observational and experimental data. The goals of this course are to equip PhD students with the intuition and skills necessary to understand and estimate causal effects and to enable students to use these methods. Relevant topics and data sets for research projects as well as potential uses in research and policy analysis will be discussed. Examples from the literature and step-by-step tutorials offer hands-on experiences in utilizing the methods.
Skills
At the end of the course PhD students
- are able to critically assess reports discussing associations between variables and interpret causal effects
- are able to independently estimate causal effects
- understand the assumptions necessary to estimate causal effects
- know how to write and run do-files with relevant commands and produce tables and figures in STATA
General competence
This course will contribute to students' general competence in
  • academic writing
  • econometric analysis with testing of hypotheses on numerical data using relevant software
  • search and review of relevant literature
  • presentation and academic discussion

Contents

The course will take up the following topics:
- Short review of basic regression techniques
- Causal inference using potential outcomes
- Randomized experiments
- Regression and causality
- Instrumental variables (LATE)
- Fixed effects and panel data
- Differences-in-differences
- Regression discontinuity design
- Synthetic control methods

Required prerequisite knowledge

The course is open to all PhD students who have taken courses in statistics or econometric which include regression analyses.

Recommended previous knowledge

General PhD statistics courses including regression analysis or econometrics courses would be an advantage.

Exam

Weight Duration Marks Aid
Individual essay1/1 Pass - Fail
Individual essay by student involving relevant econometric approaches and data.

Coursework requirements

Lectures are not compulsory, but students are expected to have a high degree of participation and be active.

Course teacher(s)

Course teacher
Yuko Onozaka
Course coordinator
Ragnar Tveterås

Method of work

The course will be taught through a combination of lectures, seminars and exercises. The seminars will include student presentations and discussions. Each student will be required to give one seminar presentation. All students are expected to read required literature ahead of the seminars and to participate actively in the discussions. Exercises will be undertaken on empirical cases (firms, sectors, markets) using appropriate data and software tools. Students will also have a written assignment in addition to the final essay.
Estimated student workload in hours:
1. Lecture 28
2. Seminar/lab exercise 8
3. Specific supervision 20
4. Student's self studies 50
5. Written assignment 40
TOTAL 146

Literature

Angrist and Pischke (2014). "Mastering Metrics - the Path from Cause to Effect", Princeton University Press.
Angrist and Pischke (2008). "Mostly Harmless Econometrics", Princeton University Press. Chapters 5.1 (Individual Fixed Effects) and 8.2 (Clustering and Serial Correlation in Panels)
Randomized Trials
Amy Finkelstein, Sarah Taubman, Bill Wright, Mira Bernstein, Jonathan Gruber, Joseph P. Newhouse, Heidi Allen, Katherine Baicker, and Oregon Health Study Group (2012): "The Oregon Health Insurance Experiment: Evidence from the First Year," The Quarterly Journal of Economics, 127 (3), pp. 1057-1106.
Jens Ludwig, Greg J. Duncan, Lisa A. Gennetian, Lawrence F. Katz, Ronagld C. Kessler, Jeffrey R. Kling, and Lisa Sanbonmatsu (2013): "Long-Term Neighborhood Effects on Low-Income Families: Evidence from Moving to Opportunity," American Economic Review Papers and Proceedings 103(3), pp. 226-231.
Instrumental Variable
Joshua Angrist (2006): "Instrumental variables methods in experimental criminological research: what, why and how," Journal of Experimental Criminology, 2, pp. 23-44.
Manudeep Bhuller, Gordon B. Dahl, Katrine V. Løken, Magne Mogstad (2016): «Incarceration, Recidivism and Employment" NBER Working Paper No. 22648.
Fixed Effects and Panel Data
Edward L. Glaeser and David C. Maré (2001): "Cities and Skills" Journal of Labor Economics, 19(2), pp. 316-342.
Differences-in-Differences
Martha J. Bailey and Andrew Goodman-Bacon (2015): "The War on Poverty's Experiment in Public Medicine: Community Health Centers and the Mortality of Older Americans," American Economic Review, 105(3), pp. 1067-1104.
Espen Bratberg and Karin Monstad (2015): "Worried sick? Worker responses to a financial shock," 33, pp. 111-120
David Card and Alan B. Krueger (1994): "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, 84(4), pp. 772-93.
Regression Discontinuity Design
Pedro Carneiro, Katrine V. Løken and Kjell G. Salvanes (2015): "A Flying Start? Maternity Leave Benefits and Long-Run Outcomes of Children," Journal of Political Economy, 123(2), pp. 365-412.
Christopher Carpenter and Carlos Dobkin (2009): "The Effect of Alcohol Consumption on Mortality: Regression Discontinuity Evidence from the Minimum Drinking Age," American Economic Journal: Applied Economics, 1(1), pp. 164-182.
Synthetic Control Methods
Alberto Abadie and Javier Gardeazabal (2003): "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, 93(1), pp. 113-132.
Serial Correlation and Clustering
A. Colin Cameron and Douglas L. Miller (2015): "A Practitioner's Guide to Cluster-Robust Inference," Journal of Human Resources, 50, pp. 317-372.
Additional literature will be announced at the start of the course.


This is the study programme for 2019/2020. It is subject to change.

Sist oppdatert: 17.06.2019