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About this book

This book paints a portrait of social life in America by providing an accessible discussion of empirical economics research on issues such as illegal immigration, health care and climate change. All the studies in this book use the same data source: individual responses to the American Community Survey (ACS), the nation's largest household survey.

The author identifies studies that clearly illustrate core econometric methods (such as regression control and difference-in-differences), replicates key statistics from the studies, and helps the reader to carefully interpret the statistics. This book has a companion website with replication files in R and Stata format. The Appendix to this book contains a guide to using the free R software, downloading the ACS and other public-use microdata, and running the replication files, which assumes no background knowledge on the part of the reader beyond introductory statistics. By opening up the hood on how top scholars use core econometric methods to analyze large data sets, a motivated reader with a decent computer and Internet connection can use this book to learn not only how to replicate published research, but also to extend the analysis to create new knowledge about important social phenomena. A more casual reader can skip the online supplements and still gain data-driven insights into social and economic behavior. The book concludes by describing how careful empirical estimates can guide decision making, through cost-benefit analysis, to find public policies that lead to greater happiness while accounting for environmental, public health and other impacts.

With its accessible discussion, glossary, detailed learning goals, end of chapter review questions and companion resources, this book is ideal for use as a supplementary volume in introductory econometrics or research methods courses.

Table of Contents

Frontmatter

Descriptive Statistics, Causal Inference, and Regression

Frontmatter

Chapter 1. Introduction: Stories, Data and Statistics

Abstract
This chapter describes the American Community Survey (ACS) and how to use microdata from it to calculate descriptive statistics and make inferences about cause and effect social relationships. It introduces the core statistical technique of regression. This chapter emphasizes an intuitive understanding of techniques and concepts, and defines and clarifies dozens of key terms used in econometric research. Questions for Review at the end of the chapter, on topics including sample weighting and inflation adjustments, illustrate the use of empirical best practices to those readers either beginning in econometrics or with experience but looking to add a valuable new data source to their repertoire.
Matthew J. Holian

Regression Control

Frontmatter

Chapter 2. At Home: Housing and Energy Use

Abstract
This chapter illustrates the regression control technique for causal inference, through an empirical case study of building codes and household energy consumption. It describes and defines key concepts, like logged variables and fixed effects, so that the beginning reader can both understand and use the regression control technique. This chapter also describes the research process, and the path a researcher can take from replicating a study, to extending it and doing original research based on the study. Questions for Review at the end of the chapter walk the reader through this process, from downloading data and replicating a published research study, to modifying the computer code and creating new knowledge.
Matthew J. Holian

Difference-in-Differences

Frontmatter

Chapter 3. Searching for Higher Ground: Migration and Quality of Life

Abstract
Migration is a source of contemporary social controversy in the USA and around the world. Britain’s 2016 vote to withdraw from the European Union, dubbed, “Brexit,” was driven by anti-globalist and anti-immigrant sentiment, and in the same year in the USA, immigration from Central America sparked a political backlash that helped elect Donald Trump as president. The American Community Survey (ACS) provides a valuable window into migration-related issues, including illegal immigration, migration across states, and settlement within cities.
Matthew J. Holian

Chapter 4. Paying the Bills: School, Jobs, and Health Insurance

Abstract
This is the second of three chapters on the Difference-in-Differences (D-in-D) technique. An empirical case study of the Affordable Care Act on entrepreneurship offers another illustration of the basic D-in-D model. This chapter introduces a new way, pre-trends analysis, to probe the model’s assumptions, and a new variant of D-in-D, the fixed effect D-in-D model. It also reviews some of the extensive literature that has analyzed both health and labor-market topics using the ACS data. This chapter also revisits a descriptive study on lawyer earnings, first introduced in Chapter 1, and extends it to software developer earnings. End of Chapter Review Questions reinforce the concepts introduced in the chapter, and give the reader ideas for original research they can carry out on labor and health questions.
Matthew J. Holian

Chapter 5. Home Economics: Family Matters

Abstract
This chapter describes studies of marriage and family. There is understandably a great deal of interest in these topics among many of my 20-year-old students. Family issues are deeply connected with economic questions addressed in earlier chapters, including migration, labor supply, and entrepreneurship. We’ll see how the ACS can be used to describe the rise of the gig economy, the difficulty of studying the causal effect of children on a family’s outcomes, and a possible way to measure the causal effect of the business cycle on fertility.
Matthew J. Holian

Instrumental Variables

Frontmatter

Chapter 6. Getting Around: Cars and Land Use

Abstract
This brief chapter illustrates the instrumental variables (IV) technique for causal inference, through an empirical case study of land use, as measured by population density, and vehicle ownership. It describes how the American Community Survey (ACS) can be used to study questions related to commuting and working from home. It emphasizes an intuitive understanding of the technique, and shows how a natural experiment on sibling gender and home size, first introduced in Chapter 1, can be used in an IV model.
Matthew J. Holian

Putting Estimates Into Action: Econometrics and Cost–Benefit Analysis

Frontmatter

Chapter 7. Conclusion: What Do We Know and What Should We Do?

Abstract
The preceding chapters have illustrated econometric methods for empirically estimating both accurate descriptions of reality and causal effects by presenting examples of research that has used the American Community Survey. The focus of this final chapter is rather different. The key question I address here is, how should these empirical estimates be used to guide public policy decision-making?.
Matthew J. Holian

Backmatter

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