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 propos 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+ 80 yr09+ B₁ OH + 8, 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 i error term The effect of the new policy in Ohio on the divorce rate is measured by $1 The divorce data is summarized in the following table. 60 Во Divorce Rate (Divorces per 100 residents) δι State 2005 2009 Ohio 3.77 6.59 Pennsylvania 3.12 3.44 Since no other factors have been controlled for in the regression equation, you know that the difference-in-differences estimator will be
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 propos 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+ 80 yr09+ B₁ OH + 8, 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 i error term The effect of the new policy in Ohio on the divorce rate is measured by $1 The divorce data is summarized in the following table. 60 Во Divorce Rate (Divorces per 100 residents) δι State 2005 2009 Ohio 3.77 6.59 Pennsylvania 3.12 3.44 Since no other factors have been controlled for in the regression equation, you know that the difference-in-differences estimator will be
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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Problem 1P
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Transcribed Image Text: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 propos
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+ 80 yr09+ B₁ OH + 8, 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
i error term
The effect of the new policy in Ohio on the divorce rate is measured by
$1
The divorce data is summarized in the following table.
60
Во
Divorce Rate
(Divorces per 100 residents)
δι
State
2005
2009
Ohio
3.77
6.59
Pennsylvania
3.12
3.44
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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