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Your objective is to estimate the effect of electronic voting, D in the 1998 elections defined as a binary indicator variable, on the public expenditure allocated to health care as a percentage of GDP, E, in 1999. Electronic voting is adopted in those municipalities with at least 40,500 registered voters, i.e., All other municipalities use paper ballots. For this question, use the following sample:
i
1
2
3
4
5
P
40,504
40,497
40,482
40,509
40,494
D
0
V
32,000
25,000
17,000
28,000
18,000
E
7
a. Briefly explain whether D is a valid indicator variable for electronic voting that is suitable for implementing a sharp regression discontinuity design.
b. Briefly explain whether P is a valid treatment assignment variable (or forcing variable).
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