Monday, October 20, 2014

Mastering ’Metrics: The Path from Cause to Effect

Have not read this yet but the follow-up to the now famous primer on microeconometrics "Mostly Harmless Econometrics" is bound to be of big interest to a lot of readers here. Will do a couple of sessions on this internally when we get some copies. Have no idea what the Kung-Fu stuff is about but both authors are top of their game in terms of micro-econometrics and the reviews are very good so I am confident this will be a very useful book. 
Applied econometrics, known to aficionados as 'metrics, is the original data science. 'Metrics encompasses the statistical methods economists use to untangle cause and effect in human affairs. Through accessible discussion and with a dose of kung fu–themed humor, Mastering 'Metrics presents the essential tools of econometric research and demonstrates why econometrics is exciting and useful. 
The five most valuable econometric methods, or what the authors call the Furious Five--random assignment, regression, instrumental variables, regression discontinuity designs, and differences in differences--are illustrated through well-crafted real-world examples (vetted for awesomeness by Kung Fu Panda's Jade Palace). Does health insurance make you healthier? Randomized experiments provide answers. Are expensive private colleges and selective public high schools better than more pedestrian institutions? Regression analysis and a regression discontinuity design reveal the surprising truth. When private banks teeter, and depositors take their money and run, should central banks step in to save them? Differences-in-differences analysis of a Depression-era banking crisis offers a response. Could arresting O. J. Simpson have saved his ex-wife's life? Instrumental variables methods instruct law enforcement authorities in how best to respond to domestic abuse. 
Wielding econometric tools with skill and confidence, Mastering 'Metrics uses data and statistics to illuminate the path from cause to effect.
Shows why econometrics is important
Explains econometric research through humorous and accessible discussion
Outlines empirical methods central to modern econometric practice
Works through interesting and relevant real-world examples

Nick Chater's online psychology course

Nick Chater, Professor of Behavioural Science at Warwick Business School, is currently teaching a MOOC called "The Mind is Flat: the Shocking Shallowness of Human Psychology". The current edition of the course started last week but you can still sign up for free.

Sunday, October 19, 2014

PhD Research at the Centre

Our research centre currently has 9 PhD students who are either taking a PhD in Economics or a PhD in Behavioural Science. The centre structure is such that PhD students, research fellows and faculty work closely together on a variety of research questions. Some of the PhD students are also directly integrated into the Economics and/or Management divisions of our School of Management. Our centre meets weekly followed by an external seminar. There are also regular workshops and training events and informal peer-learning sessions including a regular STATA users group meeting. Most of our students are located in Stirling with dedicated office-space but we also have some students who are working part-time and we are willing to discuss this option. A very detailed overview of how PhD research is conducted here is available on this web page and it is worth studying carefully if you are thinking of applying to work with us. Furthermore we strongly encourage people to look at the publications page of our webpage to ensure that the type of work we are doing is interesting to you (interesting enough that you are willing to spend 3 or 4 years of your career and beyond working on similar work!).

For those wishing to secure funding to conduct their PhD from September 2015, it is worth starting this process early as funding deadlines tend to be early in 2015. The key funder for social science PhDs in the UK is the ESRC. The website for the Scottish branch of this funding is available here.  For those wishing to apply, the relevant pathways for our group are Economics, Business/Management and Advanced Quantitative Social Science. Economics does not have a residency requirement but most of the pathways are limited to UK residents and you should check this carefully to make sure you are eligible. Given the limited availability of PhD funding in the UK, self-funding is another option.

PhD in Behavioural Science

Below you can find details of our PhD in Behavioural Science from the webpage of the Centre for Graduate Study in the School of Management. Further details of PhD study in Stirling Management School are provided on this webpage.

The PhD in Behavioural Science programme is aimed at students who want to work in the Behavioural Science Centre to conduct and publish world leading research at the interface between the social sciences (such as economics) and the behavioural sciences (such as psychology). This area - which encompasses behavioural economics - is a fast growing field within the social and behavioural sciences and this is one of the only PhD programmes within Europe to have this area as the primary focus. Completing this PhD involves becoming an interdisciplinary researcher, with advanced research skills in both economics and psychology, as well as an appreciation of how assumptions, methods, and theories differ between the two fields.

The PhD research may involve the analysis of large (N > 10,000) pre-existing longitudinal datasets, quantitative field surveys, experimental designs, randomized controlled trials, or a combination of these methods. Research can be desk based or involve our public, private, or third sector partners (such as the Scottish Government, local council, job centres, or consultancy business) normally with a focus on basic science research.

In addition to the individual supervision and structured training given to all students at Stirling Management School, students benefit from being a full member of the internationally leading Behavioural Science Centre, which has developed a genuine community of closely interacting and collaborating researchers. Members come from diverse backgrounds, with some having degrees exclusively from economics and others exclusively from psychology, but all share the same passion for researching at the interface between these two areas. There is a strong culture of joint socialising (including regular drinks and meals) and collaborating - projects normally have input from several centre members, all of whom are always willing to be a part of joint research. Collaboration and the research culture are promoted with a two hour centre meeting each week. The first 30 minutes is devoted to "business", where everyone is updated on recent relevant developments and participates in shared decision making as to the direction of the centre. The second 30 minutes is slot booked by a centre member (including our students) to use as they want - commonly to put up an early research idea for feedback, results for discussion, or present a preview of a conference talk in a supportive environment. The remaining hour is used for the weekly seminar, which has more substantial talk from centre members or more commonly presentations from invited researchers from across the UK, as well as occasionally from our partners in industry and government. In addition, we run regular workshops (including currently a £28,000 ESRC seminar series) which attract the key figures in the field. PhD students are an equal part of our community and are expected to enthusiastically participate in all aspects of centre life.

Students are part of the Division of Economics, where the centre is based, which runs additional seminars and social events. Depending on the student's background and the precise research, students may be said to graduate with a PhD in behavioural science, social science, economics, psychology or another related area that accurately describes the work and skills set developed.

Potential students are very strongly recommended to carefully review the centre website, blog, and particularly the Centre Director’s informal guide to a PhD, as well as the other pages at the links below. For interesting modules to attend whilst taking the PhD, the MSc in Behavioural Science may be particularly relevant.

Useful links:
The Behavioral Science Centre webpage
Centre Director Professor Alex Wood's Informal PhD Guide
The Centre's blog, details can be found here about the work we do, plus details on our seminars and workshops
The Centre's Twitter Feed
MSc in Behavioural Science
Example thesis from centre member Dr Christopher Boyce

If you are interested in joining the centre as a PhD student you are recommended to first approach the Director, Professor Alex Wood. You are also welcome to contact at any stage the relevant Postgraduate Research Tutor Dr David Comerford . Other helpful individuals include;

MRes in Business and Management Programme Director – Dr Scott Hurrell.

Administrator – Lisa Reid.

Saturday, October 18, 2014

Life-satisfaction correlates very well with more well established measures of societal progress

In a previous post about life-satisfaction I mentioned that the five most satisfied countries in Europe according to the life-satisfaction measure from the 2012 European Social Survey were also the top five in the 2013 Legatum Prosperity Index, although the five countries were in a different order. I thought that consistency was fairly remarkable considering that the ESS measure presumably took about 5 seconds to administer, whereas the Legatum Index uses 89 different variables to create its ranking. I wondered how well this very simple life-satisfaction measure would correlate with other established measures of societal progress. The results are below.

I used data from several places: (1) life-satisfaction ("How satisfied are you with life as a whole" scored 0-10) and trust in others ("Most people can be trusted or you can't be too careful" scored 0-10; I included this since higher trust correlates with more happiness) from the 2012 European Social Survey, (2) average $ GDP per capita over 2009-13 from the World Bank, (3) life expectancy as of 2013 from the World Health Organization and (4) country rankings from the Legatum Prosperity Index. I used all 27 countries in the EES but excluded Kosovo from the Legatum ranking and life expectancy analysis because I couldn't find data for it. I also excluded a country labelled "IS" because I couldn't find what country this code corresponded to in the ESS data dictionary.

The results are pretty clear: higher life satisfaction correlates with a better ranking on the Legatum Index (R = 0.84), higher GDP per capita (R = 0.81, 0.83 for ln GDP), more trust in others (R = 0.76) and higher life expectancy (R = 0.72). For such a simple measure I find those amazingly strong associations. 

The Stata code I used is below:
use "C:\File Location\ESS6e02.dta", clear
rename idno id
rename cntry c
rename stflife ls
rename ppltrst t
drop if ls > 10 | t > 10 | age == 999  | c == "IS" 
keep id c ls t

*Collapsing the variables by country will automatically convert trust and life-satisfaction scores into their country averages
collapse t ls, by(c)

*Average GDP per capita in $ over 2009-13 taken from World Bank
gen gdppc = 4652 if c == "AL"
replace gdppc = 45387 if c == "BE"
replace gdppc = 7296 if c == "BG"
replace gdppc = 80477 if c == "CH"
replace gdppc = 25249 if c == "CY"
replace gdppc = 18861 if c == "CZ"
replace gdppc = 45085 if c == "DE"
replace gdppc = 58894 if c == "DK"
replace gdppc = 18478 if c == "EE"
replace gdppc = 29118 if c == "ES"
replace gdppc = 47219 if c == "FI"
replace gdppc = 41421 if c == "FR"
replace gdppc = 39337 if c == "GB"
replace gdppc = 13134 if c == "HU"
replace gdppc = 47400 if c == "IE"
replace gdppc = 36151 if c == "IL"
replace gdppc = 34619 if c == "IT"
replace gdppc = 15538 if c == "LT"
replace gdppc = 47617 if c == "NL"
replace gdppc = 100819 if c == "NO"
replace gdppc = 13432 if c == "PL"
replace gdppc = 21035 if c == "PT"
replace gdppc = 14612 if c == "RU"
replace gdppc = 58269 if c == "SE"
replace gdppc = 22729 if c == "SI"
replace gdppc = 17689 if c == "SK"
replace gdppc = 3900 if c == "UA"
replace gdppc = 3816 if c == "XK"

gen lngdppc = ln(gdppc)

*Inverted Legatum Prosperity "Europe only" rankings where 1 = lowest, 27 = highest, taken from
gen legatumrank = 1 if c == "AL"
replace legatumrank = 18 if c == "BE"
replace legatumrank = 4 if c == "BG"
replace legatumrank = 26 if c == "CH"
replace legatumrank = 9 if c == "CY"
replace legatumrank = 13 if c == "CZ"
replace legatumrank = 20 if c == "DE"
replace legatumrank = 24 if c == "DK"
replace legatumrank = 10 if c == "EE"
replace legatumrank = 16 if c == "ES"
replace legatumrank = 23 if c == "FI"
replace legatumrank = 17 if c == "FR"
replace legatumrank = 19 if c == "GB"
replace legatumrank = 6 if c == "HU"
replace legatumrank = 21 if c == "IE"
replace legatumrank = 7 if c == "IL"
replace legatumrank = 12 if c == "IT"
replace legatumrank = 5 if c == "LT"
replace legatumrank = 22 if c == "NL"
replace legatumrank = 27 if c == "NO"
replace legatumrank = 11 if c == "PL"
replace legatumrank = 14 if c == "PT"
replace legatumrank = 3 if c == "RU"
replace legatumrank = 25 if c == "SE"
replace legatumrank = 15 if c == "SI"
replace legatumrank = 8 if c == "SK"
replace legatumrank = 2 if c == "UA"

*Life expectancy from WHO
gen lifeexp = 74 if c == "AL"
replace lifeexp = 81 if c == "BE"
replace lifeexp = 74.5 if c == "BG"
replace lifeexp = 82.8 if c == "CH"
replace lifeexp = 81.2 if c == "CY"
replace lifeexp = 78 if c == "CZ"
replace lifeexp = 81 if c == "DE"
replace lifeexp = 79.5 if c == "DK"
replace lifeexp = 76.1 if c == "EE"
replace lifeexp = 82.5 if c == "ES"
replace lifeexp = 79.6 if c == "FI"
replace lifeexp = 82.3 if c == "FR"
replace lifeexp = 81 if c == "GB"
replace lifeexp = 75 if c == "HU"
replace lifeexp = 81.4 if c == "IE"
replace lifeexp = 82.1 if c == "IL"
replace lifeexp = 83.1 if c == "IT"
replace lifeexp = 75.9 if c == "LT"
replace lifeexp = 81.5 if c == "NL"
replace lifeexp = 81.9 if c == "NO"
replace lifeexp = 77.5 if c == "PL"
replace lifeexp = 80 if c == "PT"
replace lifeexp = 70.5 if c == "RU"
replace lifeexp = 83 if c == "SE"
replace lifeexp = 80 if c == "SI"
replace lifeexp = 77 if c == "SK"
replace lifeexp = 71 if c == "UA"

pwcorr ls t lngdp legatum lifeexp, sig

scatter ls legatum, mlabel(c) || lfit ls legatum
scatter ls lngdppc, mlabel(c) || lfit ls lngdppc
scatter ls t, mlabel(c) || lfit ls t
scatter ls lifeexp, mlabel(c) || lfit ls lifeexp