Introduction - Who am I
- Bachelor’s in actuarial science, 2013
- Pricing actuary at Allstate until 2019
- Software Engineer in financial risk management 2019-2020
- 4th year PhD student in economics
- Anticipated graduation next academic year
- Current research in networks among boards of governors
- 1150 ELO in Age of Empires 2
- Married for 12 days
Introduction - Who Are You?
- This is a small class - I should learn all of your names quickly
- Name, major, year
- Something interesting about yourself (Optional, but recommended)
- Hobbies? Fun summer activities? Favorite math theorem?
Introduction - What is Econometrics
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Source: Randall Munroe (xkcd)
Introduction - What is Econometrics
- Historically, measurement for economists
- Use data to construct supply/demand curves, elasticity, etc.
- Current focus is causal analytics
- Used for policy analysis. Used by many fields!
- Mechanically, this class is about interpreting linear regression
- And mostly about understanding its limitations
Syllabus Review
- Office hours after class. If these times don’t work you can let me know and I should be able to accommodate most times.
- Statistical software will be used in class and homework
- Class participation via iclicker, and short weekly homework assignments
- These are intended to be easy points to keep you engaged
- This class is harder than what you’ve probably had in the past. You’ll need to pay attention in class to get an A/B
- But it’s really not that hard if you actually try!
What is Econometrics - a motivating example
- What is the effect of college education on income?
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- Will getting a masters degree after graduating increase your earnings by $13,000?
Motivating Example, major choice
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- Is the only difference the choice of major?
Motivating Example (continued)
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- Engineering majors are very different from history majors before entering a program
Introduction - What is Econometrics
- What we want is the effect of college (or major) while holding all else constant (“Ceteris Paribus”)
- Normally we can achieve this by a randomized control trial
- Usually not practical or ethical
- e.g. randomly exposing people to wildfire smoke
Introduction - What is Econometrics
- Instead we make use of research designs that use “natural experiments”
- For schools: lotteries for charter school attendance
- For pollution: the direction that wind is blowing
Introduction - What is Econometrics
- Our workhorse model is ordinary least squares (OLS) regression
- We’re just fitting a line to data
- The nuance lies in the interpretation
- Building block of more advanced machine learning and AI
