Problem%20Set%203%20-%20Choice%20-%20Demand

Problem%20Set%203%20-%20Choice%20-%20Demand - Economics...

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Economics 3010 Professor Daniel Benjamin Fall 2009 Cornell University Problem Set 3 This problem set is due in section on Friday, September 25. Please collect your answers into a stapled packet, and write your own name and your TA’s name on the front of each packet, as well as your netID and the time of the section you usually attend . 1. (Choice: Schoolwork vs. Facebook) [ This question refers to empirical analysis from a recent research paper: Goolsbee, Austan, and Jonathan Guryan (2005), “The impact of Internet subsidies in public schools,” University of Chicago mimeo. (In addition to being an economics professor at the University of Chicago, Austan GooIsbee is one of Barack Obama’s main economic advisors.) If you are interested, feel free to read more details: http://faculty.chicagogsb.edu/jonathan.guryan/research/GuryanGoolsbeeERATE.pdf ] Recently, a number of economics research papers have focused on evaluating the causal effect of technology (such as new computers and Internet access) on education. For example, Goolsbee and Guryan (2005) study the effect of the E Rate program on California public schools. In an effort to close the “digital divide” between wealthier and poorer households, the U.S. government began subsidizing Internet access in public schools and libraries as part of the Telecommunications Act of 1996. The E Rate program, which began in 1998, provided $2.25 billion in subsidies – which is enormous relative to the total public school spending on computers in 1999 of $3.3 billion. Goolsbee and Guryan (2005) find that although school districts responded strongly to these incentives (especially lower income and higher minority school districts), dramatically increasing their Internet access over the next few years, there was essentially no effect on the students’ academic achievement. (a) Some proponents of increased technology spending in schools have responded to these and other, similar findings by arguing that it will take time for technology to have positive effects on academic achievement. Why might that be so? (b) In this problem, we’re going to explore another possible explanation for the finding of no effect on
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Problem%20Set%203%20-%20Choice%20-%20Demand - Economics...

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