HW5-2011 - Department of Agricultural and Resource...

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Department of Agricultural and Resource Economics Elisabeth Sadoulet and Kyle Emerick University of California at Berkeley Fall 2011 ENV ECON 118 / IAS 118 – Introductory Applied Econometrics Assignment 5 Due Tuesday November 15, at beginning of class MAKE SURE TO REPORT ALL YOUR RESULTS IN PLAIN WORDS AS WELL AS MATHEMATICAL TERMS. ALSO TURN IN YOUR STATA LOG FILE FOR THIS PROBLEM SET Exercise 1. Impact analysis of E-ZPass on pollution by double difference In this exercise, we will consider part of a policy analysis that was published in the American Economic Journal: Applied Economics in 2011 (“Traffic Congestion and Infant Health: Evidence from E-ZPass” by Janet Currie and Reed Walker, Vol. 3, No. 1, pp. 65-90). The paper examines the effect of the introduction of E-ZPass in New Jersey and Pennsylvania on infant health. E-ZPass is an automated system that allows users of toll roads to pass through tollgates by paying electronically through a radio device. This system is similar to Fastrak in the Bay Area. The basic intuition is that E-ZPass reduces the time cars are in the queue to pay tolls and thus reduces air pollution in the nearby area. The hypothesis is that this in turn improves health of infants born to mothers residing near the toll plazas. In this exercise we will consider the intermediate result in the paper of whether the introduction of E-ZPass reduces air pollution. We have uploaded on the course website a dataset (carpollution.dta) with 973 observations. The unit of observation is a monthly average reading at a pollution monitor. In this exercise we will consider monitors to be “treated” if they are within 4 km of a tollbooth that was converted to E-ZPass. We will consider monitors as “control” if they are from 4-10 km of a tollbooth. monitorID =ID of pollution monitor month2 =Month of reading (numeric) year2 =Year of reading (numeric) logno2 =Log of daily mean NO2 logso2 =Log of daily mean SO2 treat =1 if monitor < 4km from nearest tollbooth, 0 if 4-10 km after =1 if reading after nearest toll plaza converted to E-ZPass (a) Compute the mean log NO2 concentration for treated monitors before and after the nearest toll
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HW5-2011 - Department of Agricultural and Resource...

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