In the potential outcomes framework with heterogeneous (nonconstant) treatment effect, write the error as u i (1 x i )u i (0) x i u i (1) Let s 2 0 Var u i (0) and s 2 1 Var ui(1) Assume random assignment (i) Find Var(u i x i ) (ii) When is Var(u i x i ) constant ...

i Recall that we are conditioning on so we can treat it as a deterministic vari ...

In the potential outcomes framework with heterogeneous (nonconstant) treatment effect, write the error as u i =

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In the potential outcomes framework with heterogeneous (nonconstant) treatment effect, write the error as

u_i = (1 – x_i)u_i(0) + x_iu_i(1).

Let s²₀ = Var[u_i(0)] and s²₁ Var[ui(1)]. Assume random assignment.

(i) Find Var(u_i | x_i).

(ii) When is Var(u_i | x_i) constant?

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Introductory Econometrics A Modern Approach

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Authors: Jeffrey Wooldridge

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In the potential outcomes framework with heterogeneous (nonconstant) treatment effect, write the error as u i =

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Introductory Econometrics A Modern Approach

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