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Sinning in the Basement: What Are the Rules? The Ten Commandments of Applied Econometrics

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  • Kennedy, Peter E

Abstract

Unpleasant realities of real-world data force applied econometricians to violate the prescriptions of econometric theory as taught by our textbooks. Leamer (1978) vividly describes this behavior as wanton sinning in the basement, with sinners' metamorphizing into high priests as they ascend to the third floor to teach econometric theory. But this sinning is not completely wanton--applied econometricians do (or should) follow some unwritten rules of behavior, in effect bounding the sinning and promoting a brand of honor among sinners. This paper exposits these rules, and culls from them an unauthorized list of the Ten Commandments of applied econometrics. Copyright 2002 by Blackwell Publishers Ltd

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  • Kennedy, Peter E, 2002. " Sinning in the Basement: What Are the Rules? The Ten Commandments of Applied Econometrics," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 569-589, September.
  • Handle: RePEc:bla:jecsur:v:16:y:2002:i:4:p:569-89
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    Cited by:

    1. Hendry, David F. & Clements, Michael P., 2003. "Economic forecasting: some lessons from recent research," Economic Modelling, Elsevier, vol. 20(2), pages 301-329, March.
    2. Thomas Mayer, 2006. "The Empirical Significance of Econometric Models," Working Papers 620, University of California, Davis, Department of Economics.
    3. David Greasley & Les Oxley, 2010. "Cliometrics And Time Series Econometrics: Some Theory And Applications," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 970-1042, December.
    4. William Bosshardt & Peter E. Kennedy, 2011. "Data Resources and Econometric Techniques," Chapters,in: International Handbook on Teaching and Learning Economics, chapter 35 Edward Elgar Publishing.
    5. Briz, Teresa & Drichoutis, Andreas C. & Nayga, Rodolfo M., 2014. "Detecting false positives in experimental auctions: A case study of projection bias in food consumption," MPRA Paper 57101, University Library of Munich, Germany.
    6. Michael O'Connor Keefe & James Tate & Henk Berkman, 2013. "Is the relationship between investment and conditional cash flow volatility ambiguous, asymmetric or both?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(4), pages 913-947, December.
    7. Kathryn Graddy & Peter E. Kennedy, 2006. "When are Supply and Demand Determined Recursively Rather than Simultaneously? Another look at the Fulton Fish Market Data," Economics Series Working Papers 297, University of Oxford, Department of Economics.
    8. Judith A. Clarke & Nilanjana Roy & Marsha J. Courchane, 2006. "On the Robustness of Racial Disrcimination Findings in Motgage Lending Studies," Econometrics Working Papers 0604, Department of Economics, University of Victoria.
    9. Duo Qin & Sophie van H¸llen & Qing-Chao Wang, 2014. "What Happens to Wage Elasticities When We Strip Playometrics? Revisiting Married Women Labour Supply Model," Working Papers 190, Department of Economics, SOAS, University of London, UK.
    10. Kaffine, Daniel T. & Davis, Graham A., 2017. "A multi-row deletion diagnostic for influential observations in small-sample regressions," Computational Statistics & Data Analysis, Elsevier, vol. 108(C), pages 133-145.
    11. Christopher L. Gilbert & Duo Qin, 2005. "The First Fifty Years of Modern Econometrics," Working Papers 544, Queen Mary University of London, School of Economics and Finance.
    12. Achten-Gozdowski, Jennifer, 2018. "Geschichte und Politökonomie deutscher Theatersubventionen
      [History and Political Economy of Public Subsidies for German Theatres and Operas]
      ," MPRA Paper 85087, University Library of Munich, Germany.
    13. Duo Qin, 2015. "Letís Take the Bias Out of Econometrics," Working Papers 192, Department of Economics, SOAS, University of London, UK.
    14. Armstrong, J. Scott, 2011. "Illusions in Regression Analysis," MPRA Paper 81663, University Library of Munich, Germany.
    15. repec:erh:journl:v:9:y:2017:i:2:p:50-68 is not listed on IDEAS
    16. Hübler, Olaf, 2013. "Methods in empirical economics - a selective review with applications," Hannover Economic Papers (HEP) dp-513, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    17. Arvydas Jadevicius & Brian Sloan & Andrew Brown, 2013. "Property Market Modelling and Forecasting: A Case for Simplicity," ERES eres2013_10, European Real Estate Society (ERES).

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