ECON 136 Empirical Financial Economics

Author

Colleen O’Briant

Published

March 27, 2026

Course Overview

Empirical Financial Economics examines how modern financial economists use data and statistical tools to test ideas about markets, investor behavior, and asset pricing. You will build fluency in R through hands-on work with real data and develop the empirical methods used to analyze financial questions. Over the course of the quarter, you will estimate and interpret models, work with financial datasets, and apply these tools to questions about return predictability, portfolio construction, and market behavior.

You will engage directly with influential studies, including Edmans, Garcia, and Norli (2007), Black, Jensen, and Scholes (1972), and DellaVigna and Pollet (2009), and test foundational asset pricing models such as the CAPM, the Fama-MacBeth Cross-Sectional Regression framework, and the Fama-French Three-Factor Model. By the end of the course, you will be able to assess the credibility of financial research, evaluate empirical evidence in finance, and communicate your results with clarity and rigor.

Schedule

Grading

Attendance

Because most of the work in this course is completed in class with your group, regular attendance is essential. If you expect to miss a significant number of classes, this course is unlikely to be a good fit.

You may miss up to two classes without penalty. Each additional absence will reduce your final course grade by 5 percentage points. Being more than 10 minutes late will count as an absence. Not being physically present counts as an absence.

If an unexpected situation arises, such as a major medical emergency, notify me and your groupmates as soon as possible. In that case, instead of completing the classwork during class, you will meet with your group to complete the classwork over Zoom during office hours (12:30 MWF) and the absences will not count against you.

Classwork and Homework: 20%

During each class meeting, you will spend the entire period working on a classwork assignment in small groups. These assignments are designed to build your skills and help you practice doing empirical financial economics. Classworks will be due at the end of the class period (one copy per group, rendered to html and uploaded to Canvas). Homework will be due before the next class period (to be completed and turned in individually).

You will work with three different group sets over the quarter:

  • Weeks 1–3: Groups will be randomly assigned.
  • Weeks 4–6: Groups will be randomized again.
  • Weeks 7–10: You may request groupmates for the final group set. I will try to accommodate as many requests as possible.

Quizzes: 80%

There will be five quizzes during the quarter, held on Thursdays at the start of class beginning in week 2. Each quiz is 30 minutes long, so arriving on time is important. Quizzes are based on classwork and homework, and a practice test will be provided in advance.

Each quiz includes a retake the following week, and your higher score from the two attempts will count. If you are satisfied with your first score, you may skip the retake by arriving 30 minutes late on the Thursday of the retake. Quizzes make up 80% of your final grade, so each of the five quizzes is worth 16%. No additional makeups will be offered beyond the scheduled retakes.

Grading Scale

At the end of the quarter, I will take your final grade on Canvas and round to the nearest integer (an 89.49 becomes an 89 and an 89.50 becomes a 90). Then I’ll apply this grading scale:

  • A+: 97 or higher
  • A: 94 - 96
  • A-: 90 - 93
  • B+: 87 - 89
  • B: 84 - 86
  • B-: 80 - 83
  • C+: 77 - 79
  • C: 74 - 76
  • C-: 70 - 73
  • D+: 67 - 69
  • D: 64 - 66
  • D-: 60 - 63
  • F: less than 60