Ex1(ctd) The estimate of B,,is the return to education,but can it be considered causal? While the error term,u,includes other factors affecting earnings,want to control for as much as possible Some things are still unobserved,which correlates with education.It remains to be problematic. ◆cf Angrist(1991) Econometrics 15-Zhuxi 11
Econometrics 15 - Zhuxi 11 Ex1 (ctd) The estimate of 1 , is the return to education, but can it be considered causal? While the error term, u, includes other factors affecting earnings, want to control for as much as possible Some things are still unobserved, which correlates with education. It remains to be problematic. cf Angrist(1991)
Ex2.air pollution and health 热点 柴静雾霾调查：《穹顶之下》 What's the cost of air pollution in China? Econometrics 15-Zhuxi 12
Econometrics 15 - Zhuxi 12 Ex2. air pollution and health What’s the cost of air pollution in China?
员 The estimated change in life expectancy The estimated change in TSP (and height ofthe brace)just north of the (and height of the brace)just Huai River is-5.04 years and is statistically north of the Huai River is significant(95%C1:881,-127). 247.5μg and is statistically significant 95%C:114.5.380.6). 导 景 等 8- -20 -10 0 10 20 -20 -10 0 10 20 Degrees North of the Huai River Boundary Degrees North ofthe Huai River Boundary TSP in South TSP in North Fitted Values from Cubic in Latitude O L.E.in South O L.E in North Fitted Values from Cubic in Latitude ◆Chen et al(20l3)PNAS Yi Bo +BiTSPi+others 8j, IV method to estimate the true influence Econometrics 15-Zhuxi 13
Chen et al (2013) PNAS 𝑌𝑗 = 𝛽0 + 𝛽1𝑇𝑆𝑃𝑗 + 𝑜𝑡ℎ𝑒𝑟𝑠 + 𝜀𝑗 , IV method to estimate the true influence Econometrics 15 - Zhuxi 13
Ex3.Keynes Multiplier Model Y:=C:+It+Gt, C:=a+BY:+8t, The multiplier B has important policy implication Econometrics 15-Zhuxi 14
Econometrics 15 - Zhuxi 14 Ex3. Keynes Multiplier Model The multiplier has important policy implication
Ex4.Efficient Market Hypothesis Weak form of EMH states that EY1)=E(Y) A simple way to test EMH Y=do+Eay-j+tr i= EMH implies H0a1=02=..=ap=0. If we fail to reject Ho,does EMH holds? Econometrics 15-Zhuxi 15
Econometrics 15 - Zhuxi 15 Ex4. Efficient Market Hypothesis 1 0 1 0 1 2 0 Weak form of EMH states that | . A simple way to test EMH . EMH implies : ... 0. If we fail to reject H , does EMH holds? t t t p t j t j t j p E Y I E Y Y Y H