Consider the job training grant application using

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Consider the job training grant application. Using clscrap , the change in the log of the scrap rate, we estimated the mean policy effect to be about .374. Crudely, this means an average fall in the scrap rate of about 37.4% – a very large economic effect. 97
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We also found that, even with a small number of observations, we can soundly reject H 0 : 0 against H 1 : 0 at the 1% significance level. But suppose the estimated sample average had been .040 with n 1,600 and S .637 (the same estimate obtained with n 19). This means a standard error of .637/40 .016. The t statistic is then t .040/.016 2.50, which is still a very strong rejection of H 0 . But the estimated policy effect is much smaller – roughly 4% rather than 37%. 98
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