This textbook provides future data analysts with the tools, methods, and skills needed to answer data-focused, real-life questions; to carry out data analysis; and to visualize and interpret results to support better decisions in business, economics, and public policy. Data wrangling and exploration, regression analysis, machine learning, and causal analysis are comprehensively covered, as well as when, why, and how the methods work, and how they relate to each other. As the most effective way to communicate data analysis, running case studies play a central role in this textbook. Each case starts with an industry-relevant question and answers it by using real-world data and applying the tools and methods covered in the textbook. Learning is then consolidated by 360 practice questions and 120 data exercises. Extensive online resources, including raw and cleaned data and codes for all analysis in Stata, R, and Python, can be found at www.gabors-data-analysis.com.

Table of Contents

I DATA EXPLORATION 

1 Origins of Data 

2 Preparing Data for Analysis 

3 Exploratory Data Analysis 

4 Comparison and Correlation 

5 Generalizing from Data 

6 Testing Hypotheses 

II REGRESSION ANALYSIS 

7 Simple Regression 

8 Complicated Patterns and Messy Data 

9 Generalizing Results of a Regression 

10 Multiple Linear Regression 

11 Modeling Probabilities 

12 Regression with Time Series Data 

III PREDICTION

13 A Framework for Prediction 

14 Model Building for Prediction 

15 Regression Trees 

16 Random Forest and Boosting

17 Probability Prediction and Classification 

18 Forecasting from Time Series Data 

IV CAUSAL ANALYSIS 

19 A Framework for Causal Analysis 

20 Designing and Analyzing Experiments 

21 Regression and Matching with Observational Data 

22 Difference-in-Differences 

23 Methods for Panel Data 

24 Appropriate Control Groups for Panel Data

Review

‘This exciting new text covers everything today's aspiring data scientist needs to know, managing to be comprehensive as well as accessible. Like a good confidence interval, the Gabors have got you almost completely covered!’ Joshua Angrist, Massachusetts Institute of Technology

‘This is an excellent book for students learning the art of modern data analytics. It combines the latest techniques with practical applications, replicating the implementation side of classroom teaching that is typically missing in textbooks. For example, they used the World Management Survey data to generate exercises on firm performance for students to gain experience in handling real data, with all its quirks, problems, and issues. For students looking to learn data analysis from one textbook, this is a great way to proceed.’ Nicholas Bloom, Stanford University

‘I know of few books about data analysis and visualization that are as comprehensive, deep, practical, and current as this one; and I know of almost none that are as fun to read. Gábor Békés and Gábor Kézdi have created a most unusual and most compelling beast: a textbook that teaches you the subject matter well and that, at the same time, you can enjoy reading cover to cover.’ Alberto Cairo, University of Miami

‘A beautiful integration of econometrics and data science that provides a direct path from data collection and exploratory analysis to conventional regression modeling, then on to prediction and causal modeling. Exactly what is needed to equip the next generation of students with the tools and insights from the two fields.’ David Card, University of California, Berkeley

‘This textbook is excellent at dissecting and explaining the underlying process of data analysis. Békés and Kézdi have masterfully woven into their instruction a comprehensive range of case studies. The result is a rigorous textbook grounded in real-world learning, at once accessible and engaging to novice scholars and advanced practitioners alike. I have every confidence it will be valued by future generations.’ Kerwin K. Charles, Yale School of Management

‘This book takes you by the hand in a journey that will bring you to understand the core value of data in the fields of machine learning and economics. The large amount of accessible examples combined with the intuitive explanation of foundational concepts is an ideal mix for anyone who wants to do data analysis. It is highly recommended to anyone interested in the new way in which data will be analyzed in the social sciences in the next years.’ Christian Fons-Rosen, Barcelona Graduate School of Economics

‘This sophisticatedly simple book is ideal for undergraduate- or Master’s-level Data Analytics courses with a broad audience. The authors discuss the key aspects of examining data, regression analysis, prediction, Lasso, and random forests, and more, with using elegant prose instead of algebra. Using well-chosen case studies, they illustrate the techniques and discuss all of them patiently and thoroughly.’ Carter Hill, Louisiana State University

‘This is not an econometrics textbook. It is a data analysis textbook. And a highly unusual one - written in plain English, based on simplified notation, and full of case studies. An excellent starting point for future data analysts or anyone interested in finding out what data can tell us.’ Beata Javorcik, University of Oxford

‘A multifaceted book that considers many sides of data analysis, all of them important for the contemporary student and practitioner. It brings together classical statistics, regression, and causal inference, sending the message that awareness of all three aspects is important for success in this field. Many ‘best practices’ are discussed in accessible language, and illustrated using interesting datasets.’ llya Ryzhov, University of Maryland

‘This is a fantastic book to have. Strong data skills are critical for modern business and economic research, and this text provides a thorough and practical guide to acquiring them. Highly recommended.’ John van Reenen, MIT Sloan

‘Energy and climate change is one of the most important public policy challenges, and high- quality data and its empirical analysis is a foundation of solid policy. Data Analysis for Business, Economics, and Policy will make an important contribution to this with its innovative approach. In addition to the comprehensive treatment of modern econometric techniques, the book also covers the less glamorous but crucial aspects of procuring and cleaning data, and drawing useful inferences from less-than-perfect datasets. As the center of gravity of the energy system shifts to developing economies where data quality is still an issue, this will provide an important and practical combination for both academic and policy professionals.’ Laszlo Varro, Chief Economist, International Energy Agency

Book Description

A comprehensive textbook on data analysis for business, applied economics and public policy that uses case studies with real-world data.

About the Author

Gábor Békés is an assistant professor at the Department of Economics and Business of the Central European University, and Director of the Business Analytics Program. He is a senior fellow at KRTK and a research affiliate at the Center for Economic Policy Research (CEPR). He has published in top economics journals on multinational firm activities and productivity, business clusters, and innovation spillovers. He has managed international data collection projects on firm performance and supply chains. He has done policy advising (the European Commission, ECB) as well as private-sector consultancy (in finance, business intelligence, and real estate). He has taught graduate-level data analysis and economic geography courses since 2012.

Gábor Kézdi is a research associate professor at the University of Michigan's Institute for Social Research. He has published in top journals in economics, statistics, and political science on topics including household finances, health, education, demography, and ethnic disadvantages and prejudice. He has managed several data collection projects in Europe; currently, he is co-investigator of the Health and Retirement Study in the US. He has consulted for various governmental and non-governmental institutions on the disadvantage of the Roma minority and the evaluation of social interventions. He has taught data analysis, econometrics, and labor economics from undergraduate to Ph.D. levels since 2002, and supervised a number of MA and Ph.D. students.