what is outcome variable what is treatment variable and what is instrument

INSTRUCTIONS TO CANDIDATES

ANSWER ALL QUESTIONS

1 Question 1

• This question is based on Angrist and Evans (1998, American Economic Review).

hours = β0 + β1kids + u (1)

for the population of women with at least two children (so kids ≥ 2).

(1) What are two conditions that IV must satisfy in eq. (1)?

(2) What is outcome variable and what is policy variable?

(3) What is the potential IV?

(4) What are confouding factors? (Please provide the definition). Since the IV have to be randomly assigned between treat and control groups, it is not correlated with any other confounders except the treatment. 2 •

(5) Draw a figure that describe relationship between outcome, policy variable (i.e., treatment), the IV, and confounding factors.

(6) Fill in the blank for the following statement. The IV does not have causal effect on the ( BLANK ). The IV does have causal effect on the ( BLANK ). The IV is randomly assigned between ( BLANK ).

(7) The samesex is the IV that is proposed by Angrist and Evans. On behalf of Angrist and Evans, please argue for the validity of the IV. 

Question 2

EXAMPLE: Estimating the Return to Schooling Using CARD.DTA This question is based on Card (1993, NBER).

ln(wage) = β0 + β1educ + u (2) where educ is years of education.

• A binary indicator, nearc4i , equal to one if the man was near a four-year college in high school can be used as an IV.

(1) What is outcome variable, what is treatment variable (or policy variable) and what is instrument?

(2) What is confounding factors here?

(3) What are two conditions for the IV?

(4) Please run the following regression

Attachments:

Related Questions

. The fundamental operations of create, read, update, and delete (CRUD) in either Python or Java

CS 340 Milestone One Guidelines and Rubric  Overview: For this assignment, you will implement the fundamental operations of create, read, update,

. Develop a program to emulate a purchase transaction at a retail store. This  program will have two classes, a LineItem class and a Transaction class

Retail Transaction Programming Project  Project Requirements:  Develop a program to emulate a purchase transaction at a retail store. This

. The following program contains five errors. Identify the errors and fix them

7COM1028   Secure Systems Programming   Referral Coursework: Secure

. Accepts the following from a user: Item Name Item Quantity Item Price Allows the user to create a file to store the sales receipt contents

Create a GUI program that:Accepts the following from a user:Item NameItem QuantityItem PriceAllows the user to create a file to store the sales receip

. The final project will encompass developing a web service using a software stack and implementing an industry-standard interface. Regardless of whether you choose to pursue application development goals as a pure developer or as a software engineer

CS 340 Final Project Guidelines and Rubric  Overview The final project will encompass developing a web service using a software stack and impleme