This is a paper that focuses on the independent variable(s) x and dependent variable y relationship. The paper also empathizes on the carrying out an empirical project.

## The independent variables x and dependent variable y relationship

Chapter 19 in the Wooldridge textbook Introductory Econometrics titled “Carrying Out an Empirical Project” provides a very good discussion for how to write an econometric paper.

To test your thesis/hypothesis you are to construct a multiple regression model. (i.e. one dependent variable and at least two independent (explanatory) variables). Remember that the purpose of any econometrics study is to establish a causal relationship between the independent variable(s) x and dependent variable y. (as opposed to showing correlations). One way to do this is by including other variables in the model that allow you to establish a ceteris paribus relationship between x and y. As part of your theoretical discussion you should discuss what other variables you need to control for.

### The independent variable(s) x and dependent variable y relationship

The empirical research project includes the following deliverables:

1. Firstly, a five to ten page paper (double-spaced, Times-New Roman 12-point font, and one inch margins).

2. Secondly, the R program that you used to estimate the model.

In your paper include section headings (in bold) that are described below:

1. Title Page: Include a title for your paper, your name, date, and also an abstract of 100 words or less summarizing the paper.

2. Introduction:

A brief introduction (about 1 page) that identifies the research question being addressed, also why the topic is important, previous research and findings on the topic, and a preview of how your results compare to those in the existing literature.

3. Empirical Model: The empirical model will include two parts:

a. Theory and hypothesis

b. The population regression function that you will estimate

In this section you will use economic theory (i.e. logic) to formulate your thesis/hypothesis. That is, what is the theory or logical arguments that takes the reader from your research question to the hypothesis that you plan to empirically test? The purpose of the theoretical discussion helps you establish a causal relationship between the dependent variable and also the independent variable(s). Lastly, without theory, regression estimates only provide correlations!