Econometrics: Statistical Tools to Understand Economic Data

Course Description

We are exposed to economic data and statistical analysis wherever we go: at the supermarket through prices and quantities of goods, at school through relative performance and GPAs, and in advertising through comparisons between the new iPhone 6 and a competitor’s model. Understanding the message is not an issue, but being a critical user of that information requires a deeper understanding of statistical methods.

Econometrics: Statistical Tools to Understand Economic Data is a two-week core course that introduces students to crucial statistical concepts and methods to analyze and interpret data. Economics will play a fundamental role throughout this course, as it will provide a pool of examples that we will study. The course is structured in two main blocks: organizing data and probability. Topics covered include: graphic interpretation of data, regression analysis, probability laws, random variables, normal and binomial distributions, sampling distributions, and the central limit theorem. These two blocks set the foundation for inference, which is the last part of an AP course. As a result, the course wraps up with a brief introduction to inference that connects all the topics discussed in the two main blocks.

In this course, students will learn how to draw conclusions from the data using critical thinking skills and statistical vocabulary. The course is taught through lectures and open discussions mixed with activities as supplementary learning tools. For example, students simulate a job hiring process for newly trained pilots to assess whether gender discrimination might have taken place. The philosophy used throughout the course is to encourage students to express themselves by properly taking advantage of the statistical terminology and methods discussed in class. Students are exposed to problems in a variety of subfields in economics, such as finance, public policy, industrial organization, education, and health. Problem solving and examples within these many subfields are at the heart of the course discussions. In addition, we will discuss short video clips from Freakonomics.

This course is a starting point for those students who aim to take the AP Statistics test, and for those who are learning statistics for the first time and want to have a statistics course as part of their curricula.

Prerequisites: Econometrics is an excellent option for any secondary school student who has successfully completed a second-year course in algebra and who possesses sufficient mathematical maturity and quantitative reasoning ability. Second-year algebra is the prerequisite course, so this course usually is taken in either the junior or senior year.