Friday, February 17, 2006
10 Commandments of Applied Econometrics
Peter Kennedy is very talented at making sense of econometrics. For those studying econometrics, I recommend his book A Guide to Econometrics. I have found it useful quite often. For free you can also obtain his interesting articles on what to do if you get the wrong sign and the ten commandments of applied econometrics (which I learned about in this blog post).
Here's the short version of the 10 commandments (see the paper for explanations):
1. Thou shalt use common sense and economic theory.
2. Thou shalt ask the right questions.
3. Thou shalt know the context.
4. Thou shalt inspect the data.
5. Thou shalt not worship complexity.
6. Thou shalt look long and hard at thy results.
7. Thou shalt beware the costs of data mining.
8. Thou shalt be willing to compromise.
9. Thou shalt not confuse significance with substance.
10. Thou shalt confess in the presence of sensitivity.
Here's the short version of the 10 commandments (see the paper for explanations):
1. Thou shalt use common sense and economic theory.
2. Thou shalt ask the right questions.
3. Thou shalt know the context.
4. Thou shalt inspect the data.
5. Thou shalt not worship complexity.
6. Thou shalt look long and hard at thy results.
7. Thou shalt beware the costs of data mining.
8. Thou shalt be willing to compromise.
9. Thou shalt not confuse significance with substance.
10. Thou shalt confess in the presence of sensitivity.
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It's very much worth getting the most recent edition of this book, which has two new chapters, one on Panel Data and one on Applied Econometrics (including the aforementioned ten commandments).
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