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Suppose you were investigating this research question: What is the impact of state tax and regulatory policy on long run (10 years or more) state economic growth? 1. Express a simple equation expressing the functional relationship (construct) of this research question along with other possible influences on long run state economic growth. What is the dependent variable, (causal) independent variables of main interest, and control variables? 2. What might be a way to specifically measure (operationalize) the dependent variable? 3. What might be way to specifically measure (operationalize) the key independent variables? 4. What might be specific ways to measure (operationalize) the control variables? 5. Express an equation in regression format that includes these specific measures and specific measures of the control variables. 6. Besides including some control variables, develop a strategy for taking account of different influences on state growth across states that may not be fully (or even partly) taken into account by the control variables. This might include sub-samples, interactions, matching … (Think in terms of trying to devise a way to compare states that are similar in important ways but have different tax/regulatory policies.) 7. Consider the potential for endogeneity of tax/regulatory policy. What factors might influence them? Might state economic growth influence them?
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