The BUEC 333 Project

TABLE OF CONTENTS

Section 1 - How to Get Going on Your Project

An outline for the project

How to Get the Explanatory Variables

How to Get the Dependent Variable

Notes on the Model and the Variables

An Example Excel File

Section 2 - How to Get Some Extra Data for Your Project

How Data is Organized in Cansim

How to Download the Data Associated with Specific CANSIM Series Numbers Using the World Wide Web

How to Find Extra Data for Your Project - the Quick and Easy Way

How to Convert Data Frequencies in CANSIM and Excel

Guide to a Great Project

Notes on Getting Help with Your Project from the Lab TA and Your Own TA.

How to Get the Explanatory Variables

It is really easy. Simply download this file and save it to your disk:

expl_vars.xls 

Suggested Independent Variables

CANSIM #

1

Unemployment Rate

d767289

2

Total Money Supply

d99962

3

Growth Rate of GDP

i37026

4

Consumer Price Index

p484000

How to Get the Dependent Variable

This is a little more complicated. The following table contains all the dependent variables of the following project numbers.

Project #

Dependent Variable (Series Title)

CANSIM #

1

Total Industrial Sales: Natural Gas

D344473

2

Chartered Banks Business Loans

B430

3

Total Motor Vehicle and Parts: Imports from Mexico

D443655

4

Motor Vehicle Imports from Japan

D439252

5

USA Closing Spot Rate($)in Cdn$

B3414

6

Unemployment Insurance Benefits Payments: BC

D730279

7

Sales of Lumber and Building Materials

D658287

8

Unemployment Insurance Benefit Payments

D459130

9

Export-Based Industries: Finished Goods

D317834

10

Gross Domestic Demand: Electricity

E10044

11

Total Merchandise Imports

B1100

12

Unemployment Insurance Benefits Payments: Quebec

D730274

13

Imports of Overseas-Made Motor Vehicles

D4972

14

Participation Rates 25years and over: Canada

D767261

15

Total International Travellers

D145670

16

Total Imports of Petroleum Products

D384525

17

BC Under Contruction: Raw

D4916

18

Canada Starts: Raw

D2783

19

Total Food Imports

B1101

You will need to follow these steps:

Check your project number and put down the corresponding "#CANSIM-Number" of your project.

Download the explanatory variables and the dependent variables and save them on your disc.

Dependent_variables.xls



Both files are already in a Excel 5.0-format. So all you have to do is start Excel and open up the explanatory and dependent variables-files from your disk.

Go to the "dependent variable-document". Find your assigned dependent variable in the list of twenty. Remember that you can not pick a different variable.

Select the whole column, go to to the Edit menu and select copy.

Go to the Window menu and switch back to the Excel window with the explanatory variables.

Paste your dependent variable into the empty "B" column.

You are now ready to go. 

Notes on the Model and the Variables

Make sure you figure out what your dependent and explanatory variables are.

This is critically important.

All the TAs are in Economics. They will be looking for at least some economic theory. If you do not know what each column of explanatory variables represents, you will not be able to come up with any theory.

How do you figure out what "P70000" represents? You can look it up on CANSIM.

 
 

An Example Excel File

Here is an example Excel file. It has examples of some, but not all of the tests that you need to perform to complete you project.  We will not  cover some of this material until after the midterm, so don't get too nervous if it doesn't all m ake sense right now.

You should be able to directly load it into Excel, scroll through it and get an idea of what you should be aiming for.

p-example.xls 

How Data is Organized in Cansim

You will risk failing your project if you do not understand exactly what variables you have retrieved from Cansim. Cansim is not organized in a very straightforward manner, thus it is easy to misunderstand what data you are actually using. As a result , it is crucial that you read this section thoroughly.

Cansim Data is organized into large groups called Matrices. Each Matrix contains several different data series. A series is a collection of data observations for a particular concept or element; comparable to a column in a table.

An example of a Cansim Matrix is as follows:

Matrix 440

The Title is :

 STARTS, COMPLETIONS & UNDER CONSTRUCTION; DWELLING UNITS BY TYPE, METROPOLITAN AREAS, ANNUAL, ACTUAL DATA.

Here are some examples of some of the series in matrix 440:

What data do we have in each of these series?

The first series contains annual actual data on the number of starts of singles homes in Calgary. Note that the data is actual as opposed to seasonally adjusted. In this example, it would be important to determine how Cansim defines the difference betw een housing starts and houses under construction.

Several students in pervious classes have done very poorly on their projects because they failed to understand the difference between the Matrix title and the actual series they used.
For instance. some students have   said that their dependent variable was 

the number of starts, under-construction and completions.

What they gave as their dependent variable was the title of the matrix, not the title of  the data series.   How can a house be counted as both completed and under-construction?
It is important that you read the matrix title, because it will tell you whether the data is annual Vs monthly or actual Vs seasonal, etc., and whether it data on people, cash flows, interest rates, etc. However, the series title is the place to find out what data you actually have.

How to Find CANSIM Series Numbers on the Web

The University of Toronto has a great CANSIM home page. The address is http://datacenter.chass.utoronto.ca:5680/cansim

How do you find out exactly what your number represent?

 

You have two options:

    1.  Follow the instructions above for "Access a CANSIM series by label" and read the definition there.
    2.  Under to the second section within the "Access a CANSIM series by label"-page you are able to download a data series. Specify the period for which you want to get the data and the manipulation (usually ?none?), but leave ?Output Format? at "plai n". This will give a brief definition of your series as a data header. You should make sure that you fully understand and explain what your explanatory and dependent variables are. Econometrics is about economics first and statistics second. In order to h ave your Economics right, you need to know what you data is, otherwise how can you explain it with any kind of economic theory?

 

How to download several CANSIM series at once ?

  

(D847002 , D847003 , D847004, D847005)

Make sure that your do not forget to include the brackets.

Choose the data output format. You will want to do this twice.

The first time you will need to get the data in Spreadsheet format. Once the data comes up on the screen, save it to disk, just like you saved the real_estate_sales.data file.

The second time you get the data, you will want to save it in plain format. Saving it in plain format will give you a record of the all the header information on the data.

Notes:

  1. Some of you are confused as to exactly what a header is. A header is simply a file which tells you what all the numbers mean. In your past assignments, you needed to look at the header to work out what the numbers in the first, second, third, etc. col umns actually represented. Was the first column or the second column that contained the sales prices observations? Sometimes it is difficult to remember, so you look at your header to make sure you know what each column of numbers represents.
  2. Make sure that you do not save the two data formats to the same file name. For instance do not save the Spreadsheet version of the data to Project.data and then save the Plain format version of the data to a file that is also called Project. data. Maybe you can call them Project-spread.data and Project-plain.data.

Warning:

TAs do not take kindly to people you have not bothered to figure out what their series numbers actually represent. The little series titles that were given to you with the information on your project are not enough information. The titles do not tell y ou whether the data is RAW or SEASONALLY ADJUSTED. The titles do not tell you units.
 

How to Find Extra Data for Your Project - the Quick and Easy Way

The best way to find and extra variable for your project is to use a keyword search.

Look for link entitled search CANSIM Index Files on the UofT home page, or simply follow this link. http://datacenter.chass.utoronto.ca:5680/cansim/searc h.html

Here are a few pointers for speeding up you search:

DO NOT USE the ALPHABETIC MATRIX INDEX to look for extra data. It is an incredibly slow and confusing way of looking through the database. 

How to Convert Frequencies in CANSIM ?

If you really cannot find the appropriate variable in the frequency of your dependent variable you will have to change frequencies

The frequency is given in CANSIM-header and serial-definition under the headline "Time Series Description" and there under"frequency", which is the level of aggregation. If your data are measured per week, per month, per year, this doesn't say anything about the frequency ! Only the "frequency" of data publication is relevant for data conversion.

Aggregate a CANSIM-Series

If you found data which you have to aggregate (change frequency e.g. from monthly to quarterly) then the CASIM-menue on the web is able to convert the data properly for you. What do you have to do ?

Disaggregate a CANSIM-Series

CANSIM data which are too highly aggregated requires Extrapolation (change from e.g. annual frequency to monthly frequency).

CANSIM is not able to perform this type of conversion If anyhow possible you should avoid extrapolation ! If you still are convinced of the necessity to extrapolate you will have to perform this in EXCEL.

Check with your TA on that. SOME QUESTIONS you should ask yourself when carrying out data conversion

: Think about your conversion "does it make sense to you?" , "do you know what you measure, average, sum up ?"

Steps to a Great Project

The steps for completing a project are as follows:
    1. Find a good economic theory that helps you to explain your dependent variable. Your TA will help you with this. It is not a good idea to simply make up this theory yourself. Instead, there are many texts and articles which have addressed the issue tha t you will be looking at.

      2. YOU MUST USE A REASONABLE ECONOMIC THEORY! If you decide to regress your dependent variable on rainfall, you might get a decent fit, but you will fail your project. What exactly is a good theory? The theory must give you two things. First, it must prov ide you with a list of explanatory variables. For example, per capita demand for ice-cream is related to the price of ice cream and per capita income. Second, the theory must give the functional form of the relationship between the dependent variables and the independent variables. This relationship will be expressed in a formula, such as

      lnY=a*lnK+(1-a)*lnL.

      or

      Y=a+bK+cL.

      Above are examples of two different functional forms. Note that both functional forms are linear in the parameters.

    2. Get the actual data from Cansim.
    3. Import the data into Excel, and start by running a multiple regression. After de-bugging, you get your first draft of econometric results.
    4. After interpreting these initial results, you will want to conduct further econometric inquiries, correct for problems, etc.

      5. This is where you will pick up most of your marks for your project. Talk to your TA about your initial regressions. Inevitably, there will be some problems with the regressions. For instance, you might have problems with low explanatory power, Heterosc edasticity, multicollinearity or autocorrelation. You can best demonstrate your understanding of econometrics by successfully identifying and in some cases, correcting for these problems. You will also want to conduct t-tests on each variable and F-tests on combinations of various variables to see if they are significant.

    5. You should put a complete listing of output you use in data appendices. It is also a good idea to make it easy to find stuff - Thus, Appendix A could be output from your regression, Appendix B could include output from a second EXCEL workbook that had additional tests that you performed on your model, like subset F-tests, tests for autocorrelation, and heteroscedasticity.
    6. Your TAs will be looking for your use of logic more than anything else. Simply performing various tests without explaining why you have chosen to perform those tests entirely misses the point.

Thus, the keys are : 

1. Why am I doing this test? 

2. What does the test tell me? 

3. What are the implications of the test results?

Notes on Getting Help with Your Project from the Lab TA and your own TA.

Once you have run your initial regressions, having a printout of your workbook ready to show the TA makes it easier for them to give you useful advice on your project.