Select the variables you plan to use in your econometric analysis and justify your selection. Produce a table with summary statistics for each variable and comment on the evidence emerging from the statistics.

Econometrics

Overall aim of the Coursework

The data contains information on a number of economics students who recently completed their studies at a UK University. For each student, the file reports information about their academic achievements as well as their employment status and job position six months after graduation.

You will be investigating the academic and career achievement of students from a “widening participation” or disadvantaged background. You will also be investigating the impact of gender on academic and career achievement.

Objectives

You will show an understanding of how to approach the empirical analysis of an applied real-world issues through the use of different types of regression analysis.

You will show an understanding of how to model binary variables.

You will practice on how to write concisely and precisely, and how to communicate your research findings effectively.

Task

The focus of the coursework is the investigation of the academic achievement and career prospect of students from a widening participation background.

The research question is whether students who come from a widening participation or disadvantaged background have the same likelihood of achieving a good degree and graduate employment as any other student.

Provide a brief account of the variables available for your analysis and comment on the overall quality of the data. (5 marks)

Select the variables you plan to use in your econometric analysis and justify your selection. Produce a table with summary statistics for each variable and comment on the evidence emerging from the statistics. (5marks)

Now we want to develop the regression model. Using the variables, discussed in question 2, develop your model to allow you to answer, ‘whether students who come from a widening participation or disadvantaged background have the same likelihood of achieving a good degree as any other student’. Comment on your output. You can have more than one regression. (10 marks)

Using the variables, you discussed in question 2, develop your regression model to answer, ‘whether students who come from a widening participation or disadvantaged background have the same likelihood of achieving graduate employment as any other student’. Comment on your output. You can have more than one regression. (10 marks)

What does the literature say about the topic of academic achievement and career prospects of students from a widening participation background? Do your results (from question 3) match with those of the literature? If not, why not? (10 marks)

Does your econometric model suffer from Multicollinearity? How can you reduce the level of Multicollinearity in your model? Do your results change (from question 3)? (10 marks)

We are also interested in understanding whether there is a ‘gender effect’ on disadvantaged background. What can you comment on this? To investigate this, generate an interaction term using independent variables of your choice. Run your regression and comment on your output. (15 marks)

Now your friend Sarah tells you that she believes household income impacts a students’ degree. Create a dummy variable for ‘low’ and ‘high’ Household income. Use the median household income as the threshold. How many students belong to ‘low’ household income family. What is the average overall degree mark in ‘low’ and ‘high’ household incomes? Are they significantly different? (20 marks)

How can you test Sarah theory using a non-linear regression? Run your regression and comment on your output. Can you represent this relationship graphically? (15 marks)
Total Marks: 100

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