Suppose that you are interested in estimating the causal effect of X on Y; however, you are worried that your right-hand-side variable X is endogenously determined with your outcome variable Y. Further suppose that you have another variable Z that has the potential to be a good instrumental variable for X . Which of the following statements best describes how an instrument can be used to identify the causal effect of Xon Y? O The instrument Z can serve as a proxy for the omitted variable that is causing the endogeneity problem. O The instrument Z isolates the exogenous variation in X from the endogenous variation in X. The instrument Z cannot be used to identify the casual effect of X on Y because there is no solution to the endogeneity problem. O The instrument Z can act as an additional right-hand-side variable and control for the endogeneity problem.
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- COVID-19 has undoubtedly been a defining time in our generation's history, with effects on global economies comparable insome instances to what was experienced during the Great Depression of the 1930s. The pandemic has also recalled theeconomic shockwaves of the Global Financial Crisis of 2008/09. One can argue that this episode is like none seen beforebecause it hasn’t emanated from economic factors. The pandemic is also having a broad spectrum of effects on economiesand exchange rates globally.NOMETRICS I| / My courses / Faculty Of Economics & Administrative Sciences / ECON309 / Finals/ ECON 309 Final Exam Assignm 15. Interpreting the intercept in a sample regression function is Oa. reasonable because under certain conditions the estimator is BLUE. of Ob. reasonalble if your sample contains values of Xi around the origin. tion Oc not reasonable because economists are interested in the effect of a change in X on the change in Y. d. not reasonable because you never observe values of the explanatory variables around the origin. Next pageThe problems with e.g."Acid rain" created by emissions of sulfur dioxide has been onemajor problem in Sweden, not least because emissions have occurred in other countries (eg England and Denmark) andthen transported here. Now assume that if one tonne of sulfur is emitted in England, it results in one (1) gram of sulfur deposition in Sweden. The corresponding deposit of one tonne of sulfur emissions in Denmark is assumed to be 3 grams. Suppose further that The socio-economic damage of one gram of sulfur deposit can be estimated at SEK 0.10.The marginal cost of reduce sulfur emissions in England is estimated at Z SEK per tonne, and in Denmark the equivalent is estimatedcost to 2Z SEK per tonne. Z indicates here the emission reduction in tonnes (eg in Denmark it would cost SEK 4 toreduce emissions by two tonnes). In other words, Z = 0 corresponds to the emission level where there is no reductionemissions occur. a) Suppose now that the European Union decides that Denmark and England…
- 1. Why is the existence of a correlation (existence of co-occurrence or association) between and Fnot enough evidencefor us to say that Ycauses Y?2. What is the post hoc, ergo propter hoc fallacy? Give an exampleSession 2 Questions 44 and 45 are open-response questions. ws BE SURE TO ANSWERAND LABEL ALL PARTS OF EACH QUESTION. Show all your work (diagrams, tables, or computations) in your Student Answer Booklet. If you do the work in your bhead, explain in writing how you did the work. Write your answer to question 44 in the space provided in vour Student Answer Booklet. The graph below shows the birth rate and the death rate of a mouse population ovet a three-year period. The immigration rate and the emigration rate of the population are equal. 44 Birth Rate and Death Rate of a Mouse Population Year 3 Year 2 Year 1 Time Key Death rate Birth rate a. Describe what happens to the size of the population for each year shown on the graph. Explain your answers. b. Identify three factors that could affect the death rate of the mouse population, and explain why each factor affects the death rate. 100 rient. Birth and Death RatesSuppose the administration of a University that is located a high-crime urban area mustdecide on a policy to increase policing on its campus. The student population is 10,500 students but iscould increase if crime is reduced. The cost of added policing in terms of additional salary and equipmentis estimated to be $2.4 million per year. Suppose the administration plans to make their decision with thehelp of a benefit cost analysis of the policy. VSL is $11.8 million a. Explain how the concept of Value of a Statistical Life might factor into a benefit cost analysis of thispolicy. b. How many lives would need to be save to justify the added policing costs if only prevented deathswere considered as the policy benefit? c. Suppose it is believed that student enrollment will increase in the future if crime on campus is reduced.Write a formula to calculate the present value of benefits of policing if student enrollment increases by4% each year.
- 1) John is operating an internation business in the United Stateds of American and is focused on the limitation or short-term impact of an issue. It can be said that John has a ............. 2) The grestest good for the greatest number of persons is known as the ............... approach. 3) this theorgy states that a country's wealth was deternmined by the amount of its gold and silver holding. It is ...........?Mathis Wackernagel and his colleagues at the Global FootprintNetwork continue to refine the method of calculatingecological footprints—the amount of biologically productiveland and water required to produce the energy and natural resourceswe consume and to absorb the wastes we generate.According to their most recent data, there are 1.8 hectares(4.4 acres) available for each person in the world, yet we useon average 2.7 ha (6.7 acres) per person, creating a globalecological deficit, or overshoot (p. 4), of 50%.Compare the ecological footprints of each nation listed inthe table. Calculate their proportional relationships to the worldpopulation’s average ecological footprint and to the area availableglobally to meet our ecological demands. Why is it so large for people in the United States?2. You are interested in the effect of a factory being inspected on whether it reduces its pollution output. There's a variable "number of reported violations" that you have. When the number of reported violations goes from 9 to 10, the probability of being inspected jumps from 20% to 60%. Average pollution levels decrease from 600k Imetric tons of CO2 to 500k metric tons going from 9 to 10 violations as well. What is the fuzzy regression discontinuity estimate of the effect of inspections on air pollution levels?
- Suppose that a study of changes in admission prices reveals that when the price of admissionto the museum increases by 10%, adults reduce their ticket purchases by 10%, senior citizensreduce their ticket purchases by 20%, college students reduce their ticket purchases by 25%,and children reduce their ticket purchases by 30%. If the cost of having a person visit themuseum is the same regardless of whether the person is an adult, senior citizen, collegestudent, or child, which of the following pricing schemes is the most likely to be used by themuseum and why? Group of answer choices The museum will set one price of $12 for everyone because that is the most fair. $8 for children, $10 for college students, $12 for senior citizens, and $15 for adultsbecause the museum can earn higher profits by charging the lowest price to those with theleast elastic demand and the highest price to those with the most elastic demand. $15 for children, $12 for college students, $10 for senior citizens,…ADVERSE SELECTIONSomet Health Insurance Company wants to sell a health insurance product for $700 permonth. There is no requirement for healthy people to have insurance coverage. Thecompany conducts a survey to see how different populations respond to the proposed cost.People with no illnesses and disabilities, generally the young and healthy, respond that theydo not spend $700 on healthcare in an entire year, and most feel they would not waste somuch money on premiums when the chance of needing surgery or expensive healthcaretreatments is so small. However, older, sicker people think that $700 per month is a greatdeal, as most of them spend far in excess of this amount on healthcare. It seems like agreat deal for them. What will happen to the costs of the health insurance if only the older, sicker peopleenroll?In the United States, one of the largest welfare programs is the Supplemental NutritionAssistance Program (SNAP) representing the second largest in-kind transfer programfor individuals in the US. From the abstract of the study we are told “[a] 1% increasein benefits per population raises grocery prices by a persistent 0.08%. A calibratedpartial-equilibrium model implies a marginal benefit dollar raises a recipient’s consumersurplus from groceries by $0.7, producer surplus by $0.5, and lowers each non-SNAPconsumer’s surplus by $0.05.” In other words, increasing the size of the in-kind transferleads to higher prices. This higher price results in a larger surplus for grocery stores anda lower consumer surplus for individuals not participating in SNAP. Those individualswho participate in SNAP can increase their overall consumer surplus as they haveaccess to more goods, despite the higher price. This result is estimated using thenearly 100% redemption of the SNAP benefits (i.e. assuming the…