What would you need to assume to interpret a1 as a causal

Assignment Help Business Economics

Reference no: EM133364388

Question: Consider the following regression equation:

outcome = α0 + α1*after + α2*iron + δ*after* iron + e,

where outcome denotes earnings, after is equal to 1 after iron supplementation and zero before, iron indicates that the household have received iron pills, after ∗ iron is equal to 1 for households that have received iron pills, after they received them, and e is an error term. Please briefly answer the following questions:

(a) Suppose you were to simply sample people, ask whether they took iron or not, and run the following regression: outcome = α0 + α1*iron + e. What would you need to assume to interpret α1 as a causal estimate? Is this a reasonable assumption?

(b) Suppose that iron pills are given to randomly selected households and you observe household earnings before and after households are given the pills. How would you summarize the main effects of the iron supplementation on earnings.

Reference no: EM133364388

Questions Cloud

Define this intercultural communication barrier : Define this intercultural communication barrier. Explain how it is seen or illustrated in the news report, including specific sentences and/or examples

Define weapons effect and discuss how it may account : Define weapons effect and discuss how it may account for some of the violence in today's society?

Describe how the labor hours might change in response : Describe how the labor hours might change in response to a universal basic income using the labor-leisure model of labor supply. How does the quantity of labor

What you have heard so far, you expected the defendant : what you've heard so far, you expected the defendant might be guilty, but now you definitely believe he is guilty. What would you do

What would you need to assume to interpret a1 as a causal : What would you need to assume to interpret a1 as a causal estimate? Is this a reasonable assumption? How would you summarize the main effects of the iron

What is meant by emile durkheims observation : What is meant by Emile Durkheims observation that crime is normal? Include in your answer a discussion of mechanical/organic solidarity. What is the importance

How would a change in interest rates affect financial : Are the investment and savings decisions of families and firms influenced by real or nominal interest rates? If inflation is expected to be 2 percent per year

Discuss whether or not, in your opinion, genetic characteris : discuss whether or not, in your opinion, genetic characteristics or variations in human chromosomes play a role in aggression and crime causation.

Adult justice system and the juvenile system : Similarities and differences between the adult justice system and the juvenile system The role prevention, adjudication, and disposition play in the juvenile

User Account

All Pages