econ483final2009sol - Solution Sketch: Econ 483 Final, 2009...

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Solution Sketch: Econ 483 Final , 2009 1. (1) 1 < 0 . Building an incinerator within 3 miles will increase housing prices by 100 1 % . (2) Before the construction plan, housing prices were higher at the a/ected locations than non-a/cted locations by 100 & 0 % . (3) We can control for the age of houses, a strong predictor of housing prices, which was omitted in (4) The reason why housing prices were higher at the a/ected locations than non-a/cted locations is because houses at non-a/cted locations were older. This is because age and agesq are statistically (5) b 1 reject the null of 1 = 0 , and building the incinerator does not reduce housing prices. (b) At the 10% (6) Building the incinerator does not reduce housing prices. Your explanation will di/er depending
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econ483final2009sol - Solution Sketch: Econ 483 Final, 2009...

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