Research Design

1
Research Design

• After
• finding an interesting research question
• reviewing the literature on the topic area and
• analyzing the issue using economic theory, that
  is, formulating a hypothesis (your proposed
  answer to the research question)
• You must assess whether or not your answer to the
  research question is correct. You need to test
  the hypothesis. How do you design an appropriate
  test?

2
Types of Empirical Test of a Hypothesis

• Casual Empiricism
• The type of analysis one does when constructing
  a data appendix.
• Simple Statistical Hypothesis Testing
• Measuring the distance between the mean value of
  some sample and the default mean.
• Multiple Regression
• A technique for estimating the independent
  influences of each explanatory variable, and thus
  statistically maintaining ceteris paribus.

3
Casual Empiricism

• By using Descriptive Statistics one can
  summarize the underlying data.
• Descriptive statistics includes measures of
  central tendency (mean, median, and mode) and
  measures of dispersion (variance and standard
  deviation).

4
Simple Statistical Hypothesis Testing

• Simple Statistical Hypothesis Testing involves
  rigorous procedures for presenting and evaluating
  evidence to test the validity of some conjecture
  or claim.
• Sample data will be used to test the validity of
  a claim about the population.

5
Multiple Regression

• Multiple Regression enables us to determine the
  simultaneous effects of several independent
  variables on a dependent variable using the least
  squares principle.