Econ 671 Syllabus, Fall 2012

This class has three goals. You are going to study and learn some fundamental techniques in econometrics and statistics so that you can use them in your future research. You are also going to learn some of the basic theoretical concepts in econometrics so that you can understand new techniques when you encounter them in future classes and later in your career. Finally, you’re going to learn how to use a computer to do statistical and econometric analysis.

Contact information

If you have questions about the course material, the best times to address them are in the scheduled lectures or during office hours. We can probably resolve questions or concerns about the course administration over email, but if you have urgent questions please call me or stop by my office.

Instructor Gray Calhoun 467 Heady Hall
TA Shufen Chen 80C Heady Hall


The class will meet twice a week for almost two hours. The next table lists the most important times and dates. If you have any conflicts please let me know as soon as possible.

Tuesdays and Thursdays, 9:00 to 10:50 in Lagomarcino Hall N0147
Review sessions
Fridays, 9:00 to 11:00 in Heady 272
Instructor's OH
Tuesdays and Thursdays, 11:00 to 12:00 in Heady 467
Wednesdays, 3:00 to 5:00
First midterm
October 9, 2012
Second midterm
November 15, 2012
Final exam due
December 10, 2012

The weekly review session will be used primarily for discussion of the homework and practice questions, but will also be used to present new material that supplements the regular lecture.


Your final grade will be based on two midterm exams, one take home final exam, and some homework exercises. The breakdown is as follows:

Midterm 1
Midterm 2

Homework is due in the TA’s mailbox at 4:45 every Thursday afternoon.


You need to learn how to program a computer to do statistical and econometric analysis. We’re going to use the programming language R in this class. It is a specialized programming language that is designed for sophisticated data analysis. It has three advantages over other statistical packages: it is very extensible, so designing and using new estimators is easy; the graphics it produces are excellent; and it is free (other packages have their own advantages as well, obviously). Also, I use R in my own research so my advice on programming is more likely to be useful than if we were to use another language. You can download the latest version of R from the website Some good introductions to the language are VR00, VR02, KZ08, and VSR and you can download free manuals at

One more point: I’ve found that, except with a few exceptions, students’ R code is usually unreadable. Please read Hadley Wickham’s R style guide early in the semester. It will give you a basic idea of good style for R programming.


The required textbooks are CB02, Gre12, and KZ08. CB02 gives a good explanation of basic probability and statistics. Gre12 will be a useful reference later in your career and covers many econometric estimators. KZ08 is relatively cheap and is also available online through the library (we have an institutional subscription to SpringerLink, which is the publisher’s website for e-books). You may want to save pdf versions of its chapters to your computer instead of purchasing the book from the bookstore. You should also download and install the R package that accompanies this book, called the AER package. You’ll be required to buy Hay00 next semester, so you may want to buy it now as another source of material.

This would also be a good time for you to begin reading the Journal of Economic Literature and paying attention to working papers in your field announced at

Course outline

The first exam will cover parts 1 and 2 below, the second exam will cover part 3, and the final exam is cumulative. I will announce specific readings as the semester progresses.

  1. Overview of probability
  2. Point estimation and identification
  3. Inference
  4. Additional topics in linear regression

References ———-

George Casella and Roger L. Berger. Statistical Inference. Duxbury, 2nd edition, 2002.
William H. Greene. Econometric Analysis. Prentice Hall, 7th edition, 2012.
Fumio Hayashi. Econometrics. Princeton University Press, 2000.
Christian Kleiber and Achim Zeileis. Applied Econometrics with R. Springer, 2008.
William N. Venables and Brian D. Ripley. S-Programming. Springer, 2000.
William N. Venables and Brian D. Ripley. Modern Applied Statistics with S. Springer, New York, fourth edition, 2002.
William N. Venables, D. M. Smith, and R Development Core Team. An Introduction to R.

University policies

The following policies apply to every course at Iowa State University. They are listed here for your convenience and reference.

Academic dishonesty

The class will follow Iowa State University’s policy on academic dishonesty. Anyone suspected of academic dishonesty will be reported to the Dean of Students Office,

Disability accommodation

This material can be provided to you in alternative format. Anyone who anticipates difficulties with the content or format of the course due to a physical or learning disability should see me immediately in order to work out a plan. You may also want to contact the Disability Resources (DR) office, located on the main floor of the Student Services Building, Room 1076 or call them at 515-294-7220.

Dead week

For academic programs, the last week of classes is considered to be a normal week in the semester except that in developing their syllabi faculty shall consider the following guidelines:

Harassment and discrimination

Iowa State University strives to maintain our campus as a place of work and study for faculty, staff, and students that is free of all forms of prohibited discrimination and harassment based upon race, ethnicity, sex (including sexual assault), pregnancy, color, religion, national origin, physical or mental disability, age, marital status, sexual orientation, gender identity, genetic information, or status as a U.S. veteran. Any student who has concerns about such behavior should contact his/her instructor, Student Assistance at 515-294-1020, or the Office of Equal Opportunity and Compliance at 515-294-7612.

Religious accommodation

If an academic or work requirement conflicts with your religious practices and/or observances, you may request reasonable accommodations. Your request must be in writing, and your instructor or supervisor will review the request. You or your instructor may also seek assistance from the Dean of Students Office or the Office of Equal Opportunity and Compliance.

Contact information

If you feel that any of your rights as a student have been violated, please email

This syllabus is in the public domain. You may copy and reuse it as you see fit

To the extent possible under law, Gray Calhoun (the author) has waived all copyright and related or neighboring rights to this work.