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3. The difference-in-differences estimator I Suppose a new policy was implemented in the state of Ohio in 2007 that greatly reduced the cost of filing for a divorce, both in terms of monetary fees and paperwork. In the neighboring state of Pennsylvania, suppose the cost of filing for divorce has not changed from before 2007 to after 2007. You have collected two cross sections of divorce data from the years 2005 and 2009, for a random set of counties in both states. Suppose you propose the following regression model, with no additional factors controlled for, to study how the new policy has influenced the number of divorces in the treatment group (the state of Ohio) versus the control group (the state of Pennsylvania):

3. The difference-in-differences estimator I Suppose a new policy was implemented in the state of Ohio in 2007 that greatly reduced the cost of filing for a divorce, both in terms of monetary fees and paperwork. In the neighboring state of Pennsylvania, suppose the cost of filing for divorce has not changed from before 2007 to after 2007. You have collected two cross sections of divorce data from the years 2005 and 2009, for a random set of counties in both states. Suppose you propose the following regression model, with no additional factors controlled for, to study how the new policy has influenced the number of divorces in the treatment group (the state of Ohio) versus the control group (the state of Pennsylvania):

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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3. The difference-in-differences estimator I Suppose a new policy was implemented in the state of Ohio in 2007 that greatly reduced the cost of filing for a divorce, both in terms of monetary fees and paperwork. In the neighboring state of Pennsylvania, suppose the cost of filing for divorce has not changed from before 2007 to after 2007. You have collected two cross sections of divorce data from the years 2005 and 2009, for a random set of counties in both states. Suppose you propose the following regression model, with no additional factors controlled for, to study how the new policy has influenced the number of divorces in the treatment group (the state of Ohio) versus the control group (the state of Pennsylvania): div = Bo + do yr09 + B₁ OH +8₁ OH-yr09 + u where div number of divorces per 100 residents in the county yr09 1 when the year is 2009, and =0 if the year is 2005 OH = 1 if the county is in Ohio, and =0 if the county is in Pennsylvania u error term The effect of the new policy in Ohio on the divorce rate is measured by . The divorce data is summarized in the following table. State Ohio Pennsylvania Divorce Rate (Divorces per 100 residents) 2005 2009 3.16 6.33 3.33 4 Since no other factors have been controlled for in the regression equation, you know that the difference-in-differences estimator will be
Transcribed Image Text:3. The difference-in-differences estimator I Suppose a new policy was implemented in the state of Ohio in 2007 that greatly reduced the cost of filing for a divorce, both in terms of monetary fees and paperwork. In the neighboring state of Pennsylvania, suppose the cost of filing for divorce has not changed from before 2007 to after 2007. You have collected two cross sections of divorce data from the years 2005 and 2009, for a random set of counties in both states. Suppose you propose the following regression model, with no additional factors controlled for, to study how the new policy has influenced the number of divorces in the treatment group (the state of Ohio) versus the control group (the state of Pennsylvania): div = Bo + do yr09 + B₁ OH +8₁ OH-yr09 + u where div number of divorces per 100 residents in the county yr09 1 when the year is 2009, and =0 if the year is 2005 OH = 1 if the county is in Ohio, and =0 if the county is in Pennsylvania u error term The effect of the new policy in Ohio on the divorce rate is measured by . The divorce data is summarized in the following table. State Ohio Pennsylvania Divorce Rate (Divorces per 100 residents) 2005 2009 3.16 6.33 3.33 4 Since no other factors have been controlled for in the regression equation, you know that the difference-in-differences estimator will be
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