test 1

Question 1

What is an “Ashenfelter Dip”?

Answer 1

observation that treatment group earnings fall just before entering a training program

Question 2

How does Ashenfelter Dip relate to CIA?

Answer 2

dip is indicative of a differentk type of worker, so that the workers who enter the training arent the same as workers who dont enter training(ie treatment/training program is not random)

Question 3

What is Conditional Independence Assumption (CIA)?

Answer 3

conditional on observed variables, the selection bias dissapear (ie treatment is random)

Question 4

The following are true in the research paper titled “The effect of Language on Economic Behavior”

Answer 4

1. the author proposes 2 mechanisms for the language effect: (i) altering the impied discount rate (ii) the “precision of future payoffs”
2. the author finds consistent evidence in favor of the hypothesis across a wide range of model specifications
3. the author compares results from a model with country fixed effects “within country” and a model without country fixed effects “across countries”. the author finds that the correlation between language type and savings is lower in the “within country” model

Question 5

Limited Dependent variable models

what models do you use for BINARY(0,1) Y_i dependent variable?

Answer 5

logit and probit

Question 6

Limited Dependent variable models

what models do you use for Count(0,1,2,3,4,…,n) dependent variable Y_i?

Answer 6

poisson

Question 7

Bad control Variable

Answer 7

a variable that is (or potentially) affected by treatment