Question: The discussion of random assignment experiments in Section 16.1 includes models both with (Equation 16.2) and without (Equation 16.1) two additional observable factors (X 1

The discussion of random assignment experiments in Section 16.1 includes models both with (Equation 16.2) and without (Equation 16.1) two additional observable factors (X1 and X2). In contrast, the discussion of natural experiments in Section 16.1 jumped immediately to Equation 16.3 below (which includes these factors) without discussing an equation similar to Equation 16.1.

ΔOUTCOMEi = β0 + β1TREATMENTi + β2X1i + β3X2i + εi


Was this a mistake? What reasons are there for thinking that a natural experiment is more likely to benefit from the inclusion of additional observable factors than is a random assignment experiment? Explain.

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