An Introduction to Empirical Investigations

1. An Introduction to Empirical Investigations

2. Aims of the School • To provide an advanced treatment of some of the major models, theories and issues in your chosen field(s). • To guide you through your reading of the empirical literature in your chosen field(s). • To make you aware of the opportunities for further empirical work in your chosen field(s). • To help you formulate a specific empirical research project that you can undertake. Your colleagues involved in course delivery here at the school will help with any follow up guidance you might need.

3. Why is empirical work important? • Even abstract theory has to be grounded in the real world. Economics is not maths! • Applied theorists have to motivate their work by empirical questions or observations. These are used to formulate models which are then tested on data. • Policy evaluation and to predict expected outcomes from policy changes. • To preserve our reputation and to give confidence to them who pay our wages!

4. Why should you do empirical work? • Many questions in economics are essentially empirical or have a strong empirical element. • Even if you consider yourself predominantly a teacher, it important for you to know how and why empirical results are obtained.

5. Why should you do empirical work? • In general, we are better equipped to give advice on carrying out empirical investigations when we have done it ourselves. This is important because: - • As part of their training, students are increasingly required to carry out empirical investigations. • Graduates sometimes go on to work as professional economists and it is necessary for us to ensure they are properly trained.

6. Why should you do empirical work? • Professional economists have to be econometrically literate. • Technological developments have reduced the costs of empirical work so much that I doubt that future university students/researchers will be able to avoid it!

7. Some general points • Econometric estimates are simply a sophisticated way of describing our data. • Really, just a technique for obtaining a set of conditional responses. • They tell us what relationships are stronger than if the variables were random.

8. Some general points • Economic theory tells us: - • Which relationships are interesting. • How these relationships might be interpreted. • How to distinguish between causation and correlation.

9. Issues in empirical publications • Each time you read a paper, be aware of; - • What question is being asked? • How is the data used to address the question? • What (if any) are the problems in such studies? • What conclusions are drawn? • On what assumptions are the conclusions based? • How far do you agree that the assumptions are realistic?

10. Planning an empirical investigation • There are several simple steps to be followed when planning an empirical investigation: - • Make sure you are familiar with the theory that is relevant to your chosen topic. • Read other publications in the academic journals that are related to the topic you intend to investigate. • Try to use your review of the literature to identify suitable areas for investigation

11. Writing up an empirical investigation • Most empirical papers follow a fairly standard pattern: - • Introduction • Motivation • Literature review • Development of a model • Explanation of the data • Testing the model • Results • Summary and conclusions

12. Submitting a Paper to Journal • Before you submit a paper • Ask someone whose opinion you value to read and comment on it. • Think about any comments they make and, if necessary, re-write the relevant parts of your paper. • Carefully read the submission requirements. • Follow the ‘rule of the 3C’s’.

13. After Submission • Any paper submitted to a reputable journal is always sent to a referee for a report. • This can sometimes take quite a time. • Referee’s very rarely suggest accepting a paper without any revisions. • The usual responses are ‘Reject’ or ‘Revise and Re-submit’.

14. Responding to the Editor’s Decision • Reject • Sometimes no reasons for the rejection are given! More usually reasons for the rejection are given. You have only two possible responses: - • 1 Put your paper in the bin and start all over again! • 2 Re-submit to a different journal.

15. Responding to the Editor’s Decision • Revise and Re-submit • 1 Reply promptly to the editor about your decision. • 2 You must take on board most/all of the referee’s recommendations. • 3 Sometimes referee’s reports appear hostile. • 4 It is better if your response is polite and constructive! • 5 Remember – nothing is certain!