MPE711: Global Trade and Markets ASSESSMENT GUIDE

In both assessment 1 (presentation) and assessment 2 (written research article) you will be required to work in a group on the same research topic. Groups should consist of 3 to 4 individuals. Exceptions to this can be made for offcampus students if they can demonstrate difficulty in finding group members. You are free to form your own groups, whether through face-to-face contact or by using the ‘group formation’ forum on CloudDeakin. Ensure once your group is formed that you register it on CloudDeakin. You are required to finalise your group formation by the second week of trimester.

GROUP WORK TIPS Your group will benefit from diversity. You are encouraged to form groups with a broad range of skills covering quantitative analysis, writing, editing skills and leadership skills. You should also try to form groups that cover diverse industry groups and cultural backgrounds. You should consider appointing a leader for the group. The role of the leader is to coordinate meetings and set deadlines. However, the group should still agree on decisions made by the leader and the group cannot expect the leader to bear responsibility for the group’s performance. At the initial stage, avoid assigning different tasks to each member. You are encouraged to work as a group, meaning you should first think about the project as a whole, write down some bullet points, and then meet together to work out a plan prior to the assigning of tasks. Also, do not expect to simply ‘compile’ different bits and pieces from each member to form an assignment. The group needs to sit down and ensure the whole paper reads consistently and is interconnected. Set deadlines. Think creatively about ways to make the group meetings enjoyable. Choice of location and some nice food can make a difference. Most importantly, get excited about your topic!

CHOOSING A TOPIC After forming a group, your next step will be to decide on a topic for research. There are several ways to go about this. Your topic can be on anything related to applied economics, which in itself is extremely broad.

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Choose a topic that you and your group are interested in, then read research articles related to the topic so that you might form a hypothesis based on some form of theory in the research/academic literature. One easy way to search for research articles is through the use of Google Scholar. While logged in at a Deakin computer you should have direct access to most of the research articles found on Google Scholar. If working outside of a Deakin campus then you will have to find the full reference for the research article and find the article online through the library, under ‘electronic journals’. You are free to read and reference non- academic material; however this should be used as supportive evidence rather than the basis of your research paper. Ideas for research topics can also be found by reading and viewing topics from the following websites:
• • • • Deakin Papers on International Business Economics http://www.deakin.edu.au/buslaw/dpibe/index.php TED talks http://www.ted.com/ The Economist http://www.economist.com/ Read the readings in the unit reader available for this course (CloudDeakin)

If you choose to do a topic that has already been covered in another study, you will have to clearly state where you study differs (e.g. a different data set, a different theory, etc). There is no point repeating a study by using the same data and theories. In fact, that can amount to plagiarism.

FORMING A HYPOTHESIS A critical component of your research paper is the hypothesis. A hypothesis in applied economics requires a question of causality between two observable variables; i.e. does A cause B where ‘A’ and ‘B’ are variables which are observable. Furthermore the sign of causality should be stated; e.g. does A increase B? An example of a hypothesis would be: “does paying donors for blood donations decrease the number of donors?” The hypothesised direction of causality is clear here: introducing payment causes/affects the number of donors. The hypothesised sign is also clear: introducing payments decreases the number of donors. Furthermore both payment and the number of donors are, in principal, observable (although actual data may be hard to procure). The hypothesis must be informed by some theory in the research literature. In the example above, the theory of intrinsic motivation explains why paying for something may reduce the incentive to participate in it. Intrinsic motivation says that people may participate in certain activities because they value the activity in and of itself. Paying for activities where participants are intrinsically motivated may crowd-out the intrinsic value of such activities. More specifically, if donating blood makes you feel good about yourself for being a ‘nice’ person, paying you for such a donation may remove the ‘feeling good about yourself’ aspect altogether as it will no longer be voluntary. Therefore payment for blood donations may
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reduce the total number of donors. It is important to emphasise the word ‘may’ in any hypothesis. After stating the theory and intuition as to why you think your hypothesis is true, it is important to then also state the possible reasons as to why your hypothesis might not be true. In the blood donor example, it may be the case that people continue to feel good about themselves even when money is paid, or when only a small amount of money is paid. Or perhaps people continue to feel good if they are ‘paid’ not in money terms, but in terms of ‘gifts’. It is important to account for these possible alternate hypotheses because if there are no reasons to believe why your hypothesis may be false, then there seems little reason to engage in research in it in the first place; i.e. the answer to your hypothesis then becomes ‘obvious’. For example, consider the hypothesis: ‘does giving people money make people richer’. It seems hard to argue that giving people money makes them poorer therefore researching the hypothesis seems to be a waste of effort. However, consider a different hypothesis: ‘does giving people money make them happier?’ Now one can think of alternative hypotheses; for example, money could change lifestyle choices that could, in the long-run, prove to be detrimental to one’s happiness. Alternate hypotheses could come in the form of alternative explanations for observed relationships, or an inversion of directions of causality, or inversions in the signs of hypothesised relationships, or simply that there is no relationship. The alternate hypotheses are useful because in the paper you should spend time analysing (and if possible, dismissing) them. Also remember that the theoretical and conceptual justification for your hypothesis and alternate hypothesis is crucial – simply stating the hypothesis and alternate hypothesis without giving reasons for why they might be true is pointless. WARNING: Avoid defining a hypothesis and alternate hypothesis that can co-exist. For example, consider the topic: “Will a tax on alcohol boost government revenue or reduce alcohol consumption?” Both conditions can very likely co-exist (i.e. the government gains more revenue while alcohol consumption is reduced) and in fact constitute two separate hypotheses.

FINDING DATA AND OTHER FORMS OF SUPPORT Data for your hypothesis variables A and B are not always readily available. If looking for Australian data, a good source is the Australian Bureau of Statistics. You are not restricted to any particular country; however, data tends to be more readily available for developed countries. Preferably, you should form hypothesis for which data is easily available. But in situations where they are not, consider the following alternatives: 1) Summary statistics from other papers/reports. Papers and reports often summarise their own data and findings from data. You can utilise this for your paper, but you must cite that you did not use a primary data source. For example, it may not be easy

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to get data on the number of blood donors directly. However, hospital reports may include a summary of the percentage change in blood donations in certain years. 2) Proxy variables. Be creative and think about what available data can be used to proxy/represent the variable for which you are actually interested in. For example, you may be interested in how technologically advanced a country is. However, technological advancement is not readily observable. You could instead use data on the number of patents registered in a year, or the amount of research publications produced by the country, or the amount of money spent on research and development. You should then state what you think are the limitations involved in using such a proxy. You should also think about control variables. While your primary goal is to find data on ‘A’ and ‘B’ you should also think about other factors that are correlated with A and B that could lead you to make misleading conclusions if not controlled for. For example, one may be interested in whether there is gender discrimination in terms of wages in Australia. Looking at the data, one finds that women receive less pay than men, on average. Concluding that this is wage discrimination may be erroneous because it may be the case that the majority of women choose to work part-time or in occupations that have a lower salary, both of which result in them having lower pay out of choice and not due to discrimination. In this example, the control variables are whether individuals are working full- or part-time, and the type of occupation they are in.

THINGS TO AVOID  Do not ‘stitch’ your paper together. That is, do not get four people to do four different parts of the paper and then simply staple them together. You have to spend time ensuring each paragraph flows from one to the other and that the overall paper is coherent.  Do not just ‘present’ information. For example, “this graph shows that unemployment has been decreasing over time”. Instead, tell me how decreasing unemployment is related to your hypothesis. Also in your literature review do not just say: “this paper talked about how unemployment increased over time”. Instead, tell me how the paper’s findings relate to your hypothesis and how your own paper is different. That is, as much as you can, relate all your statements to your hypothesis.  Avoid broad hypotheses. For example, ‘is an appreciation of the exchange rate good for Australia?’. Because many factors affect the exchange rate, you have to take a moment to think about what you are actually interested in. For example, the exchange rate appreciates because of the demand for Australian resources. This may affect the economy differently from an exchange rate appreciation caused by high interest rates in Australia. So, for example, the broad hypothesis could be made more specifically as: ‘is an appreciation of the exchange rate caused by the demand for natural
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resources good for Australia?’. In addition ‘good for Australia’ is another vague term. Does this mean Australia’s GDP? The average level of happiness in the country? The more specific you are, the better.

FRAMING THE PRESENTATION The following is a requirement for your presentation format. • • • • Hypothesis: state your hypothesis clearly. Also, state any alternate hypothesis and why you think the answer to your question is not immediately obvious. Justification for your hypothesis: from what theory or literature does your hypothesis and alternate hypothesis come from? How will you conduct your analysis: what variables will you need for your analysis, and where will you get the data from? How important or useful will your study be? Who are the parties that will most likely use your results?

Remember that you have 12 minutes. Be precise and concise.

FRAMING THE PAPER The following is a requirement for your research paper format. • • Abstract: a short paragraph (around 150-200 words) about your hypothesis, your data source, and your main result). The abstract does not count towards your word limit. Introduction and hypothesis: what is the justification for your hypothesis, what are the alternative hypotheses and what are the criteria you will use to determine if your hypothesis is accepted or rejected? Literature review: what have other studies done that are related to yours, and how does your study differ from those studies? It is important to highlight and illustrate your theoretical framework here. Analysis: this is where you use graphs, tables, figures and summary statistics to support or reject your hypothesis (note, it is okay if your hypothesis is rejected by the data – you just have to be clear why it happened) Conclusion and limitations: what are the main uses or implications of your findings and what were the limitations of your study?

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Remember that you have a strict 2000 word limit. This limit includes in-text references but not the reference list at the end and not the abstract. Again, be concise and precise. Do not include something just because it sounds interesting or it demonstrates that you have been reading a lot. Only include something if it is directly related to your hypothesis.

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SAMPLE BROAD TOPICS (you still have to define your own specific hypothesis for each)

1) Is it more important for a country (in terms of productivity) to focus on getting some individuals into completing postgraduate degrees, or for a country to focus on getting most of the population into completing primary education? 2) Is income inequality higher in richer or poorer countries? Why? 3) Do countries with less restrictive trade policies enjoy better economic growth? 4) Are countries with a higher income tax rate richer or poorer in general? Why? 5) Are rich, modern economies more likely to be characterised by monopolies or small homogenous firms? 6) Does a carbon tax help the poor or the rich? 7) Should education be subsidised by the government?

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