11 Suppose you are interested in estimating the effect of hours spent in an SAT preparation course(hours) on total SAT score (sat). The population is all college-bound high school seniors for a par-ticular year.(i) Suppose you are given a grant to run a controlled experiment. Explain how you would structurethe experiment in order to estimate the causal effect of hours on sat.(ii) Consider the more realistic case where students choose how much time to spend in a prepara-tion course, and you can only randomly sample sat and hours from the population. Write thepopulation model assat = Bo + Bihours + uwhere, as usual in a model with an intercept, we can assume E(u) = 0. List at least two factorscontained in u. Are these likely to have positive or negative correlation with hours?(iii) In the equation from part (ii), what should be the sign of B1 if the preparation course is effective?(iv) In the equation from part (ii), what is the interpretation of B,?

A control experiment is conducted to test the deviations in the dependent variable to get…

Answered: 11 Suppose you are interested in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Select the scenario which is an example of voluntary sampling. Answer Keypad Keyboard Shortcuts Tables An airline is interested in getting feedback about their on-board catering experience. They place a questionnaire in the pocket behind each airline seat for passengers to O fill out. An urban planner is interested in determining the traffic volume along a particular road. To estimate the traffic volume, he counts the number of cars that go by during the next 30 minutes. O To determine the mean domestic electricity consumption in the region, the electric company collects data from randomly selected households in the given region. A fitness center has 400 male clients and 300 female clients. They plan to buy new equipment, so they randomly select 80 male clients and 60 female clients and ask them what equipment they use the most.
Econometrics Thomas Eisensee and David Stromberg wanted to measure how much news coverage of a foreign disaster impacted the amount of disaster relief provided by the U.S. government. They argue that the simple relationship would be biased. Let X = Minutes of News Coverage and Y= Disaster Aid. Choose a variable X2 that could bias the simple relationship. This variable should impact the amount of coverage and impact the amount of aid for reasons other than purely news coverage. Eisensee and Stromberg introduce an instrument Z = During the Olympics. Explain how Z could satisfy the relevant and exogenous criteria. Explain how you could use Z to estimate the impact of X on Y free from X2 bias. Hint: you should mention two stages.
(Yi, X1i, X2i) satisfy the assumptions of the attachment. You are interestedin β1, the causal effect of X1 on Y. Suppose that X1 and X2 are uncorrelated.You estimate β1 by regressing Y onto X1 (so that X2 is not included in theregression). Does this estimator suffer from omitted variable bias? Explain.
Number of Scenario Firms Type of Product Market Model A large city has lots of small shops where people can buy sweaters. Each store's sweaters reflect the style of that particular store. Additionally, some stores use higher-quality yarn than others, which is reflected in their price. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care about who sells them their socks. The technology for producing socks is widely known, and any reputable person who wanted to start a sock manufacturing business could obtain a loan from a bank to buy the necessary machinery. In a large city, two taxi companies own all the licenses that the city will grant to operate taxis. Consumers don't care which cab company they take-if they decide it's worth taking a cab, they flag down the nearest one. The government has granted the U.S. Postal Service the exclusive right to deliver mail.
With Panel Data, if we assume that the individual effects vi are not correlated with the regressors Xit (i.e. E(vi|Xit) = 0), which one of the following statements is correct: The Fixed Effects estimator is not consistent. Both the OLS and the Random Effects estimators are not consistent. The OLS estimator is not consistent, but the Random Effects estimator is consistent. The OLS and the Random Effects estimator are consistent. All of the above. None of the above
QUESTION 7 Which is NOT true about the coefficient of determination? As you add more variables, the R-square generally rises. As you add more variables, the adjusted R-square can fall. If the R-square is above 50%, the regression is considered significant. The R-square gives the percent of the variation in the dependent variable that is explained by the independent variables. The higher is the R-square, the better is the fit.
3. Boyoung is writing a paper about the effect of Sunday liquor sales on drunk driving. She has panel data on which states allow liquor to be sold on Sunday in which years and wishes to estimate a difference-in-differences model. She writes the following regression equation: Year DUIRate;; = atate +a? + BTreatmentt +yControl;t + Eit i Which of the following changes does Boyoung need to make? a) She should include a constant in the regression equation. b) She should not include controls because they're already accounted for by fixed effects. c) She should include a time trend instead of time-fixed effects. d) None of the above are changes she needs to make.
Exercise Annika spends all of her income on golf and pancakes. Greens fees at a local golf course are $10 per round. Pancake mix is $2 per box. When Annika's income is $100 per week, she buys 5 boxes of pancake mix and 9 rounds of golf. When Annika's income rises to $120 per week, she buys 10 boxes of pancake mix and 10 rounds of golf. Based on these figures, determine whether each of the following statements is true or false, and briefly explain your reasoning 1. Golf is a normal good, and pancake mix is an inferior good 2. Golf is a luxury good 3. Pancakes are a luxury good
In June 2015, Gallup conducted a poll of a random sample of 14802 adults to determine the well-being of people living in the United States. One question asked, "Did you exercise at least 30 minutes for 3 or more days in the past week?" In the survey, 57.3% of males and 42.7% of females responded yes to this question. Which of the following is true about this scenario?A. 57:3% and 42.7% are both statistiesB. 57.3% and 42.7% are both parameter.C. If we took another random sample of 14802 adults, we would expect to get the exact same results.
A justification for job training programs is that they improve worker productivity. Suppose that you are asked to evaluate whethe r more job training makes workers more productive. However, rather than having data on individual workers, you have access to data on manufacturing firms in Ohio. In particular, for each firm, you have information on hours of job training per worker (training) and number of nondefective items produced per worker hour (output).(iv) If you find a positive correlation between output and training, would you have convincingly established that job training makes workers more productive? Explain.
The board of a football club consists of three extremely wealthy owners and five fans of the club. To decide on a proposal, the board uses a voting game in which all three wealthy owners and at least two fans must vote in favour in order for the proposal to be accepted. (a) Show that the voting game use by the board for deciding whether to approve a motion can be weighted. (b) For the voting game used by the board, find the Shapley-Shubik index of each fan. Hence, or otherwise, find the Shapley-Shubik index of each extremely wealthy owner. (c) Suppose that the board changes the voting game used to decided whether to ap- prove a proposal so that, in order to be approved, at least two extremely wealthy owners and at least three fans must vote in favour of the proposal. Can this voting game be weighted? Brieflv justifv vour answer.
E CENGAGE MINDTAP Adaptive Test Prep (Ch 01) Question 3: In the graph below, as the relationship between the variables X and Y is: 40 30 C D 10 10 20 30 40 X value direct. O undefined. O independent. inverse. 20 Y value

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS