Does b tell us anything about how test scores would be

Reference no: EM13391268

Education Production Functions. Consider the following education production function:

test i = b 1 + b 2 class _ size i + b 3 free _ lunch i + b 4 class _ size i ∗ free _ lunch ,

where test i represents student i's predicted test score in percentil points, class _ size i is i's class size, and free _ lunch i equals 1 if i receives a federally subsidized lunch at school, 0 otherwise.

a. Suppose that b3 = 0.05 . Interpret this finding. (Hint: Evaluate the production function for free _ lunchi = 0 and for free _ lunchi = 1 .)

b. Suppose that b2 = -0.01 and b4 = -0.005 . Interpret this finding. Are the class size effects larger for students on free lunch, larger for students not on free lunch, or the same for both?

c. Suppose that the education production function above is estimated using data from Project STAR. Does b 2 give a biased estimate of the true causal effect of class size on test scores? Why or why not?

d. Suppose once again that the education production function above is estimated using data from Project STAR. Does b 2 tell us anything about how test scores would be affected by a large-scale class-size reduction program? Why or why not?

Reference no: EM13391268

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