1. Analysis

2. How the theory lead to (empirical) analysis In most papers the theory is there to help understand the empirical work. – It must be the minimum required for the reader to understand the empirical results. – Keep it simple. Don’t build a fancier model then you need. – If you are estimating a structural model, do your theory with that model. If you must make concessions for the empirical work, do it in the theory. If your empirical model is not structural, use a simple theory Example – Lahiri and Song. http://www.ses.wsu.edu/People/faculty/rosenm an/econs529/lahiri.pdf http://www.ses.wsu.edu/People/faculty/rosenm an/econs529/lahiri.pdf

3. Theory to Analysis (continued) The model section should leave the reader with the hypotheses you are going to empirically test. – This is the point to state (or restate) your hypotheses – They should be clear, and able to be proved false. Purpose of the analysis section – Describe and verify that the methods you use are correct – Provide empirical evidence addressing the hypotheses and ultimately the research question.

4. Components of the analysis section Hypotheses to be tests Description of the empirical model – Describe the independent and dependent variables. Explain why each variable is included. – Explain your choice of the specific functional form. – Explain what the error term represents. The statistical method of estimation – How it works – Why it is appropriate – Why you chose it over competing methods Description of any modifications from normal procedures How the results answer the hypotheses, and support the research question. The expected results.