ECN601 APPLIED MICROECONOMETRICS ASSIGNMENT
Assignment title: An analysis of the determinants of life satisfaction: Evidence from
Wave 10 of Understanding Society

You should structure your assignment as a journal article but you are not expected to include
an elaborate literature review. You should carry out two different econometric analyses:

• Convert the life satisfaction variable into a binary variable equal to 1 if the respondent
reports being mostly or completely satisfied with their life and equal to 0 otherwise. Use
a Linear Probability Model (LPM) and a non-linear probability model to analyse the
determinants of being satisfied with life.

• Use an ordered probit or logit model to analyse the life satisfaction variable.

You should present the results from both analyses in the assignment, interpret the results and
discuss the advantages and disadvantages of taking different modelling approaches.

The following articles may provide useful references in deciding which variables to select for
your analyses (available via the Leganto reading/resource list on Blackboard):

Clark, A.E., (2018). "Four decade of the economics of happiness: where next?", The Review of
Income and Wealth, 64(2), pp. 245-269 [Read Sections 1-3 only]

Clark, A.E., and Blanchflower, D.G., (2021). “Children, unhappiness and family finances”,
Journal of Population Economics, 34, pp. 625-653

Formatting instructions:
The submission must adhere to the following specifications: font type: Arial; font size: 12; line
spacing: 1.5. You may present your results as Stata output or preferably in tables (you will
need to produce results in tables for your dissertation so you may find it useful to invest time
now in gaining familiarity with the Stata commands estout or esttab, which can be used to
produce tables of results). All tables should be discussed in the text so you need to be
selective - no marks will be given for tables that are not discussed. All tables must be numbered
and have self-explanatory titles. All variables appearing in tables must also have self-
explanatory names and it may help to provide a table containing a list and description of all
variables. A short reference list should appear at the end of your assignment. You should also
include an Appendix with the Stata commands that you used to prepare the dataset and run the
analysis. The word limit is 2000 words, excluding tables, references and the Stata appendix.
Harvard referencing must be used - for more information see:
https://librarydevelopment.group.shef.ac.uk/shef-only/referencing/economics_harvard.html
Submission instructions:
The submission date for the assignment is Thursday 31st March at 12:00 noon. Note that the
template must contain the registration number of each member of the group.

Please ensure that you have read the assessment guidelines provided on the PGT Student
Handbook, including late penalties, assessment cover sheets, Turnitin submission
requirements, extension requests and extenuating circumstances.

Other guidance:
See 301 web pages on effective collaboration:
Group Work and Collaboration - Communication - Study Skills - 301 - SSiD - The University of
Sheffield