HW1b-Ch3&4_Xtns_Gruber3e

HW1b-Ch3&4_X - Gruber 3rd Ed Public Finance CHAPTER 3 EMPIRICAL TOOLS OF PUBLIC FINANCE#s 1,2,4,7,14*1 Suppose you are running a randomized

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Gruber: 3 rd Ed, Public Finance CHAPTER 3: EMPIRICAL TOOLS OF PUBLIC FINANCE (#s 1,2,4,7,14) *1. Suppose you are running a randomized experiment and you randomly assign study participants into control and treatment groups. After making the assignments, you study the characteristics of the two groups and find that the treatment group has a lower average age than the control group. How could this arise? *2. Why is a randomized trial the “gold standard” for solving the identification problem? *4. A researcher conducted a cross-sectional analysis of children and found that average test performance of children with divorced parents was lower than average test performance of children of intact families. This researcher then concluded that divorce is bad for children’s test outcomes. What is wrong with this analysis? *7. You are hired by the government to evaluate the impact of a policy change that affects one group of individuals but not another. Suppose that before the policy change, members of a group affected by the policy averaged $17,000 in earnings and members of a group unaffected by the policy averaged $16,400. After the policy change, members of the affected group averaged $18,200 in earnings while members of
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This note was uploaded on 08/23/2011 for the course ECON 4504 taught by Professor Robertpennington during the Spring '11 term at University of Central Florida.

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HW1b-Ch3&4_X - Gruber 3rd Ed Public Finance CHAPTER 3 EMPIRICAL TOOLS OF PUBLIC FINANCE#s 1,2,4,7,14*1 Suppose you are running a randomized

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