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Inls Is based on a Hhalotra and 'v'enkatramanl [2U1'JJ working paper. A researcher is interested in studying the effect of safe water on child...

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Inls Is based on a Hhalotra and ‘v'enkatramanl [2U1‘JJ working paper. A researcher is interested in studying the effect of safe water on child mortality. She uses the clean
water program, Progromo o'e Aguo Limpio {PAL}, to study this issue. PAL was launched in Mexico in
1991, following a sudden emergence of cholera in Central America. Some towns were given access
to PAL funds to chlorinate the water. Other towns did not receive those funds. The allocation of
funds was not random. For each town in Mexico. the researcher compiles the Child Mortality Rate {per LUBE) children},
CMR, for the period 1985-19‘90 and the mortality rate for the period 1991-1996 and sets up a
difference in difference regression. In this regression, each town {indexed by I") is observed twice—
once before and once after PAL is introduced. Let Aftert be an indicator variable equal to 1 if the
observation corresponds to the period 1991-1996. Let PAL,- be a dummy variable equal to 1 if the
observation corresponds to a town that received PAL funds. CMRF 2.23 - 0.42 After. + 0.32 Per,- — 1.43 erasert * Pet,- + eit Question 1 18 pts Create a 3 by 3 difference in difference matrix and fill it based on the coefficients you see above.
Enter the values in each cell. PAL No PAL Difference Period 1991-1995l H H l
Period 1935-1990l H H l Difference l l l l l l


Actual vs. perceived returns to schooling We saw that the returns to schooling are approximately T4196 per year--each years of schooling
increases annual income by 7~11%[depending on country]. Do pupils understand the 1.ralue of
education? In Jensen {2810], the author:
1. Measured the actual returns to education in Dominican Republic
2. Asked pupils about what they thought their wages would be it they completed more schooling 3. lCarried out an intervention where treated pupils were told what the expected returns to
schooling are. Consider the following summary statistics table. TABLE III
(1]I {2) (3]
Measured mean Perceived {self} Perceived {others}
Primary - 3,18t‘.I 3,516 3,478
[1,400] [334] [353]
Secondary 4,4?9 3,845 3,765
' [1,432] [1,044] [99?]
Tertiary 9,681 5,12? 5,099
[3,107] [1,629] [1,588]
Secondary ~ primary 1,299 329 23'?
[403] [3'13]
Tertiary — secondary 5,202 1,282 - 1,334
[1,341] [1,222] Notes. All figures in 2001 Dominican pesos (RM). Standard deviations in brackets. Column [1} provides
the mean earnings among men aged 30-40 fmm a household my condoned by the sum in January 2901.
The number of observations is 1.2T8 orimary. 339 secondary. and 83 tertiary. Colmans (2} and {3) oroyide


D Question 3 2 pts The actual returns. of education are for completing secondary education [relative to primary education] and for completing tertiary education [relative to secondary education]. Question 4 2 pts When children think about their own future earnings, perceived returns of education are l for completing secondary education [relative to primary education) and l for completing tertiary education [relative to secondary education}. D Question 5 2 pts In the space below. write a brief comment describing what we know about student's perceptions of return to schooling; include a discussion of how they perceive themselves against their peers. HTMLEditori
B I 9 £7.71;
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Now consider the effects of the intervention. In the table below, Round 1 was collected at baseline
[before intervention]. Round 2 was collected after students were shown what earnings were for
people of different schooling levels {i.e.. they were provided actual returns to schooling}. TABLE W
Worm W cm mam Eli-mm um Baa-mum}.- Nu Giovanna!
Panel A. Minn-ed mm m Incl-ml
Hanna 1 Round 2
(Emu-III Tram“: Conn-u] Tlulmem DifiarmJn-dmm
m1 naming {all}:
mrmw 3.613 3.434 5.533 3.280: 434'"
(115} {124} {118) {M} {4-3}
mm (mm 333+ 3.806 4.001 3.995 52"
[132} {14-5} [132) [ll-l) (“I
Implied penalised lemma 338 322 418 1'55 W"
{25] {2'3} {24] (34] (S91
Banded mm {when}:
Primnu {only} 3,509 5.44.1 3.51.6 3,334 -2'H‘“
{112) [130} [113} (92] (-111
Sandal-3' {who am 3323 3.892 3.916 192'-
l‘lfli net} [129} [II I} (45}
Implied perceived rarnu'na m 231 316 1'12 3??“
{23] (29] {1'2} (31] (251
Number HW- 1.033 1.022 922 91"? 1m D Question 6 2 pts What sort of table best describes the table above? 0 First stage 0 Second stage '3' Balance of treatment arms CI Attrition table 0


Question ? 2 pts After the treatment. the implied rate of return to secondary education {self} increased by l l ; the intervention was able to raise the perception of the returns by Finally, consider the following table. "Returned next year" is an indicator equal to 1 if the child went back to secondary school a year after the intervention. Finished school is an indicator equal to 1 if
they ended up completing secondary school. Years of schooling measures how many years the
student spent in school in total. log inc. per capita, school perfromance, father finished secondary
and age are control variables. Treatment is dummy =1 if child received the information intervention. TABLE V
Pull ample Pour bun-chum- Lint poor lunfllufldl
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lflJflS] {HM} (0M) (23} {0.034} {III-033} {0.11} H 1] (0.3333 (H.031) (1112} {41]
Lin 0.095" flfi'" 0.7T" Hall Dflfid W ELEV“ 1M" ILIH'J' [LID 0.51 as
(inc. pa'upitlll (0.01m [£1014] [0.15] {471' (11063} {W} 10.23} [HT] [11.13] “1131 (114.5] [133}
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fig! —'fl'.fl1I} MUM -0.DDB HIE" 4104:: EM —D.ll"u'1 -IS “.005 EMS 0.095 —35
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Question 3 1 pts [in average, treated pupils completed more years of schooling. Question 9 1 pts 1What was the effect of the intervention in terms of the likelihood of returning the following year? 0 Treated children were 4.1 percentage points more likely to retum to school.
0 Treated children were 0.1341 percentage points more likely to return to school C? The elasticity of retum to school was 4.1%. Question 10 2 pts Relative to treated children in rich households, treated children in poor households increased their ‘ [ Select ] perceived returns to schooling by ' . However, they [SElEEt] ' increase the likelihood of returning to school the following year.

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