Problem Set 1: Due February 23

Prepare a one page paper in outline form. The paper will design a study that will test one or more hypotheses based on the paper Kremer, Michael. “The O-Ring Theory of Economic Development.” Quarterly Journal of Economics. 108 (August 1993): 551-575.

It is your task to decide what aspects of the paper you believe would be the most interesting to examine, and then to propose a research design that would address those aspects conclusively.

Your outline will have three parts:

1) Describe the hypothesis or hypotheses you wish to test. Each hypothesis should be defined precisely so that the empirical counterpart to the hypothesis follows directly.

2) Use a method discussed in class (primal, dual, single-equation CES, earnings function, event history, …) to frame the analysis. Describe how the method would be used to test each hypothesis.

3) Describe the data set (i.e. unit of observation; time and spatial frame; variable definitions) you would need to conduct the analysis. Note, the data set need not exist currently. You can assume that the Bureau of Labor Statistics will give you sufficient budget to collect whatever data you will need if the data does not currently exist.

Please do not prepare more than a single page. There is no one right answer, so you can take chances.