Stephen J. Schmidt decided to write this econometrics textbook because he felt that
it featured strengths not found in current texts on the market. These features
include:
A Text for Economics students: Schmidt focuses on the importance
of economics in motivating the problems and generating the equations to be
estimated rather than on the statistical techniques. Chapters begin with an
empirical economic problem that integrates economic ideas directly into the
text presentation, making the material relevant to the student and directly
relating it to economics. It presents the subject, not as a series of statistical
techniques, but as a way of thinking about economic issues that students have
confronted in introductory economics or other courses they have taken before
taking econometrics.
Appropriate Level and Amount of Math: Schmidt is written
at just the right level of rigor for undergraduates. It contains enough mathematics
to be rigorous without so much mathematics as to be inaccessible, and combines
the math with graphical and intuitive explanations of the results. Students
will get the most out of the course by being challenged but not being overwhelmed.
Use of the Computer is Integrated Throughout the Text:
Schmidt contains over 130 econometric exercises, plus computer-based simulation
exercises that can be done either in or outside of class. The simulations
allow students to see how estimation works when the data generating process
is known, helping them understand what estimation does in the traditional
exercises where the process is not known. The econometric problems do not
stop when the student has calculated the estimated parameter value and tested
its significance, but require the student to explain what the estimated value
means in the context of the economic model which motivated the problem, and
the economic conclusions the student can draw from the results.
Emphasis on the role of the economic model in econometric analysis:
The importance of economic ideas for selecting models and data are covered
at the beginning of the book in chapters 1 and 2, including the use of theory
to distinguish real results from spurious correlations, and the problem of
choosing data to avoid sample selection bias. This teaches students how to
put econometric analysis to practical uses, in a way that does full justice
to both statistics and economics.
Data Sets Re-applied: Some of the data sets are used in
more than one problem in the Schmidt text, and some in more than one chapter.
This reapplication of a data set lets students see how the techniques taught
in the later chapters help them learn more from the data sets than they could
learn with the simpler techniques in the earlier chapters.
Integrated one-chapter treatment of modern time-series
methods including ARMA modeling, unit root tests, Granger causality, and vector
autoregression. An undergraduate-level presentation of material essential
for modern macroeconometrics, together with a discussion of why macroeconomists
use these techniques. This integrated treatment permits students to grasp
quickly the essentials of reading and of performing modern macroeconometrics.
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2005 McGraw-Hill Higher Education