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ECON20003
Quantitative Methods
Subject Outline
Introduction
Welcome to ECON20003, Quantitative Methods 2 (QM2). Having solid quantitative problem-
solving skills is essential for future careers in commerce. Learning these skills can be
challenging, but they are becoming crucial for success in business and economics. QM2
should not be a hard subject, but it does require the mastery of analytic skills, and thus it
necessitates your constant attention throughout the semester.
Subject Overview and Aims
The overall aim of this subject is to help you become proficient in the use of quantitative
techniques essential for analysis in business and economics. A wide range of skills will be
covered during the semester. On successful completion of the subject, you should be able to:
(a) Identify the correct technique to solve a particular quantitative problem,
(b) Implement each technique, and
(c) Interpret the results from these techniques.
You will use the skills you develop in QM2 in the business, economics, finance, marketing,
and management subjects you study during the remainder of your time at the University of
Melbourne, and, most importantly, later in the workplace.
Learning Outcomes
Learning Outcomes and Generic Skills
To view the subject objectives and the generic skills you will develop through successful
completion of this subject
Awareness Issues
At a broader level, studying this subject will increase your awareness and the breadth of
questions that are investigated within business and economics, the wide range of statistical
information that is publicly available, and the future subjects you can take to learn more
quantitative techniques.
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Eligibility and Requirements
To view the eligibility and requirements, including prerequisites, corequisites, recommended
background knowledge and core participation requirements for this subject, please see the
University Handbook:
Email Protocol
Please note that we are only able to respond to student emails coming from a University
email address. Please do not use personal email addresses such as Yahoo, Hotmail or even
business email addresses. Emails from non-University email addresses may be filtered by
the University’s spam filter, which means that we may not receive your email. All
correspondence relating to this subject will only be sent to your University email address.
Note that you must first activate your University email address before you can send or
receive emails at that address.
While academic staff endeavour to address queries received via email, it is more appropriate
to resolve substantive questions during the tutorials and/or via the Ed Discussion Board. With
this in mind, we encourage students to attend all lectures and tutorials and to follow the Ed
Discussion Board.
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Lectures
Lecture Times and Venues
ECON20003 is a dual delivery subject.
There are two one-hour lectures a week.
Tuesday 15:15 – 16:15 (The Spot-B01 - Copland Theatre)
Wednesday 12:00 – 13:00 (The Spot-B01 - Copland Theatre)
Lecture Schedule
Week Lecture (Date) Topic
Required Reading from
W 2nd ed. & S 8th ed.
1
1 (26 July)
2 (27 July)
Introduction and General
Information about Quantitative
Methods 2 (QM2)
Estimation and Hypothesis Testing
W: Ch 1-2, § 3.1-3.6, 3.8-
3.9
S: § 8.3, 9.3-9.4, 10.1-
10.3, 10.5, 12.1-12.4
2
3 (2 August)
4 (3 August)
Desirable Properties of Point
Estimators
Parametric and Nonparametric
Techniques
The Assumption of Normality
W: 3.7
S: § 10.1, Ch 20
Introduction
3
5 (9 August)
6 (10 August)
Comparing Two Population Means
or Central Locations with
Parametric and Nonparametric
Techniques
S: § 11.1-11.3, 13.1-13.2,
20.1-20.2
4
7 (16 August)
8 (17 August)
The Chi-Square, t and F
Distributions
Inferences about One or Two
Population Variances
Inferences about One or Two
Population Proportions
W: § 3.5
S: § 9.5, 10.4, 11.4, 12.6,
13.3, 14.1-14.2
Assignment 1 due in by 10am on Monday 22 August
5
5
9 (23 August)
10 (24 August)
Comparing Several Population
Means with One-Way Analysis of
Variance (ANOVA) Based on
Independent Samples and
Randomised Blocks
S: § 15.1, 15.3-15.4, 20.3
Mid-semester online test from 8am 29 August till 10am 31 August
6
11 (30 August)
12 (31 August)
Chi-Square Tests for the Analysis
of Frequencies
Measures of Association
W: § 3.4
S: § 5.4, 16.1-16.2, 16.4,
17.6
7
13 (6 September)
14 (7 September)
Linear Regression: Specification,
Estimation and Assessment
W: Ch 4-5, 6.1-6.3
S: § 17.1-17.4, 17.7, 18.1-
18.2
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15 (13 September)
16 (14 September)
General F-test
Omitted and Irrelevant Variables
Alternative Functional Forms
Multicollinearity
W: § 6.6, 6.8, 7.1-7.3
S: § 17.5, 17.7, 18.1-18.2,
19.1
Assignment 2 due in by 10am on Monday 19 September
9
17 (20 September)
18 (21 September)
Heteroskedasticity
Using the Sample Regression
Equation
Dummy Independent Variables in
Regression Models
W: § 5.3, 6.7, 8.1-8.2, 9.1-
9.3
S: § 17.5, 17.7, 18.3,
19.2-19.3
Mid-semester break from Friday 23 September to Sunday 2 October
10
19 (4 October)
20 (5 October)
Dummy Dependent Variable
Regression Models: Linear
Probability, Logit and Probit
Models
W: § 8.3-8.5, 8.7
S: App. 19.A
11
21 (11 October)
22 (12 October)
Cross-Sectional vs. Time-Series
Data
Regression Analysis with Time
Series Data
Autocorrelation
W: § 10.1-10.3, 11.1-11.2,
11.4
S: § 4.2, 18.4
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Assignment 3 due in by 10am on Monday 17 October
12
23 (18 October)
24 (19 October)
Stationary and Non-Stationary
Processes
Spurious Regression
Dickey-Fuller Unit Root Tests
W: § 12.1-12.3
Lecture Slides
Lecture slides will be made available on LMS prior to each lecture. Students are encouraged
to read the slides and the relevant parts in the prescribed and/or the recommended textbook
before attending or watching each lecture. Be prepared to take some notes in lectures, as
some important explanations of the material might not be detailed on the slides.
Recorded Lectures
The lectures will be live-streamed Every teaching week of the semester the two one-hour
lectures will be recorded and made available on LMS right after the lectures, granted that
some technical problem does not prevent IT to do so. You can access the recorded lectures
by clicking on the Lecture Recordings (or similar) menu item on the LMS page for this
subject.
Tutorials
Tutorials commence in the first week of semester (week beginning Monday 25 July).
Tutorial dates, times and locations can be found on the University timetable.
Enrolling in Tutorials
Students should enrol in tutorials via the Student Portal. After subject registration, students
are allocated to available classes. It is the students’ responsibility to ensure their registrations
produce a clash-free timetable. A change to your allocated tutorial time can only be made if
there is space in alternative tutorials. The tutors and the lecturer cannot help students with
tutorial changes. Late enrolment into tutorials is handled by STOP 1.
Tutorial Classes
The tutorials are a fundamental component of the subject. They are designed to practice
skills covered during lectures in the previous week.
This semester some of the tutorial classes will be on campus in various computer labs while
others will be online (Zoom) in real time. For each tutorial students can download a detailed
tutorial handout from the subject website the previous week after the second lecture, i.e.
Wednesday 1pm. Students can also watch a video on the subject website before each
tutorial on how to use the R / RStudio software.
Every tutorial consists of two components.
PART A: Tutorial questions and exercises to be completed manually and/or with R / RStudio.
Detailed explanations, instructions and solutions are provided in the tutorial
handout to assist students to do these exercises in their own pace.
Students are expected to read the tutorial handout, to watch the corresponding
video on R / RStudio and to attempt the illustrative exercises before the tutorial
class, so that they can ask relevant questions and help if needed during their Zoom
tutorials. In addition, the tutors might discuss some additional practice exercises to
highlight the crucial points of the week.
PART B: Homework exercises and questions for assessment. They are similar to the Part A
exercises but they are organized as weekly Canvas Quizzes.
Students need to submit their answers to these exercises in the relevant Canvas
Homework Quiz by 10am on Wednesday of the next teaching week. They can do
so via the submission link that opens after the first lecture, i.e., at 5pm on Tuesday.
For example, the tutorial 1 HW is due by 10am August 3 and the submission link is
available from 5pm July 26.
The answer for each exercise must be typed in the corresponding box available in
the Quiz. If an exercise requires R, the relevant R / RStudio script and printout
must be inserted in the same Quiz box below the answer. Please note that
handwritten scanned answers and uploaded doc, docx, pdf, jpeg etc. files are not
accepted.
There will be 11 tutorial homeworks on weeks 1-11. The solution(s) for the week 1
homework exercise(s) is (are) to be submitted by 10am on Wednesday in week 2,
the solution(s) for the week 2 homework exercise(s) is (are) to be submitted by
10am on Wednesday in week 3, …, the solution(s) for the week 11 homework
exercise(s) is (are) to be submitted by 10am on Wednesday in week 12.
Private Tutoring Services
The Faculty has become increasingly concerned about the existence of a number of private
tutoring services operating in Melbourne that heavily target University of Melbourne students
enrolled in FBE subjects.
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Students are urged to show caution and exercise their judgement if they are considering
using any of these services, and to please take note of the following:
Any claim by any of these businesses that they have a “special” or “collaborative” or
“partnership” style relationship with the University or Faculty is false and misleading.
Any claim by a private tutoring service that they are in possession of, or can supply you
with, forthcoming University exam or assignment questions or “insider” or “exclusive”
information is also false and misleading.
The University has no relationship whatsoever with any of these services and takes these
claims very seriously as they threaten to damage the University’s reputation and undermine
its independence.
Note also, that it is inappropriate for students to provide course materials (including
University curricula, reading materials, lecture notes, tutorial handouts, exam and assignment
questions and answers) to operators of these businesses for the purposes of allowing them
to conduct commercial tutoring activities, or to any other businesses and websites. Doing so
may amount to misconduct and will be taken seriously. Those materials contain intellectual
property owned or controlled by the University.
We encourage you to bring to the attention of Faculty staff any behaviour or activity that is
not aligned with University expectations or policy as outlined above.