5.The most common justification provided for the tax subsidy to homeownership in the US is thathomeownership has positive externalities that renting does not. As Glaeser and Shapiro (2002)write: "To its supporters, the home mortgage interest deduction is the cornerstone of Americansociety. Homeownership gives people a stake in society and induces them to care about theirneighborhoods and towns. By subsidizing property ownership, the deduction induces people toinvest and then to have a stake in our democracy. Ownership makes people vote for long-runinvestments instead of short-run transfers."Consider the following regression model:Мeetingsi 3D Bo + Bi x Нотеower + uMeetings is the number of town hall meetings the individual attended in the last year andHomeowner equals 1 if the individual is a homeowner. A researcher who collects data andregresses Meetings against Homeowner finds that B, > 0.The OLS estimator, B, however, likely suffers from omitted variable bias because the set ofpeople who buy homes are likely to be the types of persons who would be more inclined tomake social connections, participate in the political process, and take care of their propertieseven if they were renting. Because of this omitted variable bias, it is likely the case thatB1.A)В)

Given information: The regression model is given.

Answered: The most common justification provided…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Part 1: Starting your own business often means that you will be taking out loans, and in that case you are the one providing the return for the bank on their investment in you. On the other hand, when you save money and invest towards your retirement or home or equipment etc., you are the one benefiting from someone else taking out a loan, or paying dividends, or improving their product and so raising stock value in their business. You will doubtless be a borrower and an investor at some time in your life, paying interest and earning interest. How do you feel about that? Is compound interest ethical in your opinion?
Part of the agreement between your spouse and yourself for purchasing a larger house than you could currently afford was that you would build a garden and sell produce to make some extra money. Your plan is that the garden proceeds will cover 20% of your $1,500 mortgage payment for four months during the year. The Homeowner association has recently reinforced that ‘food-production’ space must be in the backyard and may not consume more that 20% of the backyard. If your backyard is 60’ x 130’, how many dollars per garden square foot will you need to average per production month in order to meet your planned mortgage reduction?
3. Lia’s marginal tax rate is 25% and she itemizes her tax deductions. a. How much is a $500 deduction worth to her? b. How much is a $500 tax credit worth to her? c. Suppose we want to subsidize higher education purchases for low to middle income families. Comment on whether a deduction or credit against the income tax would be more appropriate
Don and Bob own a small business as equal partners. They entered into a cross-purchase buy-sell agreement several years ago and funded the agreement with life insurance. Don has now died, and the personal representative of his estate has demanded that Bob honor the agreement by purchasing Don's half interest in the partnership for the price stated in the agreement. Which one of the following statements about the income, gift, or estate tax implications of this business planning technique is correct? A) If Bob purchases the life insurance policy on his life from Don’s estate at its replacement cost, a portion of the death benefits from this policy (when Bob dies) will be taxable income to the recipient. B) If the price established in the agreement for Don’s interest does not undervalue the interest, no gift tax will be due from this transaction. C) The death benefits received by Bob from the life insurance policy on Don will be taxable income to Bob since a transfer for…
1. Redback Industries is a relatively small but successful and fast-growing maker of peripheral devices for cell phones including battery chargers, enhanced antennas, SIM cards, and custom carrying cases. Costco is considering purchasing Redback in order to sell the devices as private label offerings. However, Costco has set an offer price of $ 600M that depends on whether Redback’s current Annual Net Income is higher and significantly different from its 14-year average of $ 104.5M per year; Redback has indicated it is willing to sell itself to Costco at the $600M price. Use the following information to determine at the 95 % Level Of Confidence whether Costco will proceed with the purchase at the planned price of $ 600M or will lower its offering price if Redback’s current Annual Net Income is not greater than $ 104.5M per year. Redback Industries Normalized Yearly Annual Net Income over the last 14 years is $ 104.5M Redback Industries is currently reporting Yearly Annual Net…
You have been asked for help by your friends, Max and Minnie, both aged 30, whoare too busy with their jobs to be able to manage their personal finances effectively.Max is a road surface operative. He earns £27,970 a year. Minnie is a psychologist.She earns £65,970 a year.Each of them contribute £2,400 of their annual earnings to their workplace pensionscheme. The scheme is a “defined contribution” scheme, which invests theircontributions to build up a pot of assets, out of which they can draw a pension whenthey retire.Their employers match their contributions up to £2,400 per year, so each of them has£4,800 going into their pension pot each year.Their own pension contributions are deductible from their income before their incomeis charged to income tax. But neither their own pension contributions, nor any incometax, are deductible before the calculation of national insurance.The contributions of their employers do not count towards the income on which tax ornational insurance are…
The chief loan officer of La Crosse Home Mortgage Company summarized the housing loans extended by the company in 2017 according to type and term of the loan. Her list shows that 70% of the loans were fixed-rate mortgages (F), 20% were adjustable-rate mortgages (A), and 10% belong to some other category (0) (mostly second trust-deed loans and home equity loans). Of the fixed-rate mortgages, 80% were 30-year loans and 20% were 15-year loans; of the adjustable-rate mortgages, 30% were 30-year loans and 70% were 15-year loans; finally, of the other loans extended, 30% were 20-year loans, 60% were 10-year loans, and 10% were for a term of 5 years or less. (a) Draw a tree diagram representing these data. 20 s 5 10 <=5 15 30 30 30 20 ca5 15 (b) What is the probability that a home loan extended by La Crosse has an adjustable rate and is for a term of 15 years? (c) What is the probability that a home loan extended by La Crosse is for a term of 15 years?
According to the table below, which of these is a possible taxable income for a married couple filing jointly in the 33% federal income tax bracket?
Steven and Donna have been married for 35 years. Both are in great health, but they feel it is time that they start planning for their future health needs. Steven is 60 years old, and Donna is 61 years old. They have been approached by a long-term care insurance salesperson who is offering the following insurance product: . . . . Annual maximum benefit: $67,200 or 80% of annual cost, whichever is less. Daily maximum benefit: $187 or 80% of daily cost, whichever is less. Billing cycle: 360 days. Premium for policy with 180-day elimination period: $3,248. Premium for policy with 90-day elimination period: $3,696. Premium for policy with 30-day elimination period: $4,256. Steven and Donna are interested in possibly purchasing one of these policies. Use the following information to help them analyze which policy may be the best alternative, The current annual cost of a good nursing care facility in their area is $91,440, They have $28,000 saved in a money market savings account, $11,200 in…
Based solely on the information given, do you have reason to question the results of the following hypothetical study? Explain your reasoning. A study by a conservative foundation is designed to assess a new Democratic spending plan. Is there reason to question the results? Select all that apply. O A. Yes, there is reason. It makes sense that a Democratic spending plan would be studied by a conservative foundation. B. No, there is not reason. The goal of the study is clear. O C. Yes, there is reason. There is a possibility of bias in the study. D. No, there is not reason. It is unlikely that there are any confounding variables in the study. O E. Yes, there is reason. The variables that were measured are not identified. O F. No, there is not reason. There is no bias in the study. O O O O O 0
You may need to use the appropriate appendix table or technology to answer this question. Individuals filing federal income tax returns prior to March 31 received an average refund of $1,059. Consider the population of "last-minute" filers who mail their tax return during the last five days of the income tax period (typically April 10 to April 15). (a) A researcher suggests that a reason individuals wait until the last five days is that on average these individuals receive lower refunds than do early filers. Develop appropriate hypotheses such that rejection of H0 will support the researcher's contention. A) H0: ?= $1,059 Ha: ? ≠ $1,059 B) H0: ?< $1,059 Ha: ?≥ $1,059 C) H0: ? ≥ $1,059 Ha: ? < $1,059 D) H0: ?> $1,059 Ha: ? ≤ $1,059 E) H0: ?≤ $1,059 Ha: ? > $1,059 (b) For a sample of 400 individuals who filed a tax return between April 10 and 15, the sample mean refund was $910. Based on prior experience, a population standard deviation of ? = $1,600may be…
A6

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