431 Problem Set 2

# 431 Problem Set 2 - Problem Set#2 Econ 431 Dr Hansen Due...

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Problem Set #2 Econ 431, Dr. Hansen Due Monday, Feb. 6th, by 4 pm to Bryan’s inbox in FOB 130 NOTE: As noted in the syllabus, no late assignments will be graded. You may work on the problem set in a group of up to four members. However, each student should turn in his or her individual problem set, written in his or her own words. Put the names of all those you worked with under a heading “Group” at the top of your problem set. 1. You are a researcher examining the effect of a program that gave laptops to poor children in 2008 to help them in school. One region, Freedonia, participated in the program, but a neighboring region, Sylvania, did not. You find that the average standardized math test score in Freedonia in 2009 (after the program has taken effect) is 0.2, while the average score in Sylvania in 2009 is 0.3. The average score in 2007 was 0 for Freedonia and 0.2 for Sylvania. a. Calculate the difference-in-difference effect of the laptop program. b. Does the difference-in-difference effect give you a better estimate of the effect of the laptop program than simply comparing results for Freedonia and Sylvania in 2009 or comparing 2009 results to 2007 results using just the Freedonia data? Explain why.

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