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ECO 120
Problem Set 2
Due: Friday, April 25th (by end of class). No late problem sets will be accepted.
1. A researcher obtains data on the distribution and use of insecticideinfused nets in a
malariainfested region where the UN has been distributing these nets at random to the
population.
biting and therefore is thought to reduce the probability of contracting malaria.
For
a random sample of individuals, the researcher constructs 3 variables:
given
, a dummy
variable measuring whether an individual was given a net through the program;
used
, a
dummy variable for whether the individual actually used a net (either through the program
or from some other source); and
malaria
, a dummy variable for whether the individual
actually contracted malaria.
We are interested in 3 questions:
1. Does net use reduce the probability of getting malaria?
2.
What is the probability that someone that is given a net will actually use it? How
does this compare to the probability that somebody that is not given the net will buy one
on their own and use it?
3. How does giving someone a net a/ect their probability of getting malaria?
(a) Write out the 3 simple Ordinary Least Squares (OLS) regressions to answer each
question. These regressions will all include only 1 independent variable.
(b) Under what assumptions do these regressions give unbiased estimates of causal e/ects?
For each regression, describe whether these assumptions are plausible.
(c) Assume that your regressions yielded the following coe¢ cients (standard errors in
parentheses):
1
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View Full Document Dependent Variables
used a net
had malaria
had malaria
had malaria
(1)
(2)
(3)
(4)
constant
0.120
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This note was uploaded on 05/04/2008 for the course ECON 120 taught by Professor Robinson during the Spring '08 term at University of California, Santa Cruz.
 Spring '08
 robinson
 Economics

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