Econometrics Term Paper

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The research topic for this semester is to examine how substance abuse, particularly alcohol and marijuana use, affect high school student outcomes. The data will be drawn from the National Longitudinal Survey of Youth (NLSY) 1997 cohort. Must use Stata. 7-10 pages.

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Term Paper - Data Codebook Economics 231W University of Rochester Prof. Ronni Pavan Variables and Description The dataset, ECO231W substance.dta, contains high school and substance abuse outcomes for a recent set of high school students. Each observation reflects performance over the past year and substance use over the past 30 days. You can safely make the assumption that substance use over the past 30 days is a good proxy for use over the year. Student performance over the year can cover multiple grades. Variable Name Brief Description Min Max StudentID Year dadHGC momHGC Wealth97 male white black other age minGrade maxGrade hsGPA advancedMath advancedEng failAny everCollege Alcohol30 Pot30 student identifier - has no economic meaning Survey year Father’s highest schooling grade completed Mother’s highest schooling grade completed Family wealth measured in 1997 Indicator that student is male Indicator that student’s race is white Indicator that student’s race is black Indicator that student’s race is other Student’s age Minimum grade attended in past year Maximum grade attended in past year HS GPA over the past year Student took any advanced math in past year Student took any advanced english in past year Student failed at least 1 course in past year Student ever attended 4 year college Number of days drinking alcohol in past month Number of days smoking pot in past month 1 1997 7 7 $50 0 0 0 0 14 9 9 0.66 0 0 0 0 0 0 3990 2004 20 20 $600,000 1 1 1 1 21 12 12 4.25 1 1 1 1 30 30 1 Term Paper Guidelines Economics 231W University of Rochester Prof. Ronni Pavan Fall 2018 Purpose As noted in the syllabus, a written term paper is a course requirement. The purpose of this project is to provide you an opportunity to formulate an econometric model, estimate the model with appropriate data, and interpret the results. Additionally, the term paper will give you an opportunity to work on your writing skills, particularly your ability to write clearly and concisely about technical material. Topic and Data The research topic for this semester is to examine how substance abuse, particularly alcohol and marijuana use, affect high school student outcomes. More precisely, I want you to try and estimate the causal impact of substance abuse on schooling outcomes, such as GPA, failure, and dropout. I will uploaded a data set on Blackboard that includes measures of substance abuse and schooling outcomes for a group of individuals who attended high school in the late 1990’s. The data will be drawn from the National Longitudinal Survey of Youth (NLSY) 1997 cohort. I will also included a codebook on the course web page that describes all the variables in the data set. Everyone will be researching this topic, although each student must choose how to best use the available data and the techniques learned in Economics 231W. Think carefully about which independent variables to model, the exogenous variables to include in the regression, the potential for heterogenous impacts, and what remaining omitted variables may plague the analysis. Pay particular attention to the issue of selection (students who choose to consume alcohol and marijuana likely differ from those that do not) and how it might impact your interpretation. A discussion of whether you have identified causal relationships between substance abuse and schooling outcomes is required. Unlike the homework assignments, this work should be entirely your own. Group work is not allowed for the paper. If you have questions or concerns regarding the paper please talk either to the TA’s or to me. Organization of the Paper The paper should be at least 7 pages and no more than 10 pages of double-spaced text using a reasonable font size and margins. The title page, tables, and graphs do not count in this page limitation. If your paper looks like it is getting too long, cut out the least interesting parts. I will penalize papers that are wordy and excessively long. Your paper should include the following: 1. Title Page with Abstract. The abstract should be less than 50 words and summarize the topic, methodology, and main findings. 2. Introduction. This section should state the nature and objectives of the project along with a brief review of any relevant literature. Make sure to provide some background or motivation for why you think the project is interesting and/or important. 3. Description of the model(s). You should write out the econometric model(s) you plan to estimate, and discuss the expected impact of the exogenous variables in your model. 4. Data description and model estimation. You should use the techniques developed in class to analyze your data and estimate your model(s). Make sure to describe the dataset you are using by providing summary statistics of important variables. Your results should be reported and discussed in this section and could include: parameter estimates, standard errors, t-statistics, F-statistics, and R2 . 1 5. Conclusion. Review the major findings and discuss the limitations of your approach. Also, include any possible extensions that might address some of these limitations. Policy implications, if any, could also be included in this section. 6. Tables and graphs. Your paper must include at least one table of results. Any tables and graphs should be well-labeled and accessible to the reader. Due Dates The final copy of the paper is due on Wednesday, December 12th at the beginning of class. Papers turned in after this time will be penalized a full letter grade for each additional day the paper is late. There are two assignments leading up to the final draft of your paper. They will be graded on both content and writing. Assignment 1 - Literature Review I will post on Blackboard a few academic articles related to substance abuse and educational outcomes. Your job is to summarize at least TWO of these articles in TWO pages or less. As part of your summary you should discuss the basic research question the authors seek to answer, the methodology employed, and any limitations in the approach. Do not despair if you do not understand fully the methodology. Just describe what the authors do to the best of your ability. Finally, summarize the main findings of each article. Assignment 1 is due at the beginning of class on Monday, October 22th. Late assignments will not be accepted. Assignment 2 - Data Analysis In TWO pages or less, discuss the econometric model(s) you plan to estimate. This should include discussions of the key dependent variables and regressors. In addition, include at least one table that describes the data. Example summary statistics include the proportion of students who consume alcohol and pot, average GPA, etc. If you include an additional table with preliminary model results you are likely to receive better feedback. Assignment 2 is due at the beginning of class on Wednesday, November 28th. Late assignments will not be accepted. Grading Assignments 1 and 2 will each count for 2.5 percent of your final grade. The final paper itself will count for 10 percent of your final grade. Since this is a writing class, you will be graded on the quality of your exposition as well as your econometric analysis. 2
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Running head: ESTIMATION OF EFFECTS OF SUBSTANCE USE

Estimation of the Effect of Substance Use on High School Academic Performance
Author’s Name
Institution Affiliation
December 2018

ESTIMATION OF EFFECTS OF SUBSTANCE USE
Abstract
In this paper, I will examine the relationship between substance use, specifically alcohol
and marijuana use and high school academic performance by examining performance on GPA,
failure, and dropout among a representative sample of youths from the National Education
Longitudinal Survey. I pooled a simple OLS bivariate regression and applied FE estimator and
2SLS to refine it.

Keywords: substance use, high school academic performance, school dropout

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ESTIMATION OF EFFECTS OF SUBSTANCE USE

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Estimation of the Effect of Substance Use on High School Academic Performance
Introduction
The substance has been playing a part in human society throughout history. Some believe
a small amount of use will not cause any harmful effects, on the opposite, will create happiness
and relief. What is more, as a matter of fact, the society now does not punish tobacco using at all,
sometimes even views alcohol a poetic thing. However, to be objective about it, substance using
is harmful in several ways such as easily becoming addictive, impeding brain development,
causing emotional instability, losing accurate judgments, leading to violence, diminishing
productivity and so on. As social capital, adolescents consume substance as well, some are even
affected by substance abuse, and this causes serious social concerns.
The consumption of an addictive substance, such as alcohol, tobacco, and marijuana
often experiments during high school, and researchers have always wanted to find out the
relationship between substance use and high school performance. Considerable research has
demonstrated a negative association between marijuana and alcohol use and educational
attainment. While most scholars think substance use itself causes a decline in school
performance, some indicate in the paper that initiation time may influence how bad the effects
are, some think frequency matters, some believes substance using decreases school attendance
and therefore affects school performance, and some proved by data that amount is the key of
influence. There are also researches on how stop using substance can influence academic
performance.
The article “Does alcohol use during high school affects educational attainment?:
Evidence from the National Education Longitudinal Study” is one of the best examples that seek

ESTIMATION OF EFFECTS OF SUBSTANCE USE

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to estimate the association between high school alcohol use and educational attainment, this
article measures explicitly the effect around age 26. Chatterji be...


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