3 Person i, who is caught speeding, can choose to attend a day-long speed awareness course...
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3 Person i, who is caught speeding, can choose to attend a day-long speed awareness course instead of taking three points on his or her license (12 or more penalty points disqualify you from driving). Let Y; = 1 if person i is caught speeding again within the next 3 years, and let Y; = 0 otherwise. Further, let Di 1 if individual i takes the course, and let D = 0 = otherwise. (a) Suppose that Y (2) where Yi (Yoi) denote the potential outcomes if individual i takes (does not take) the course. Assuming that the individual treatment effect of taking the course is constant and equal to 3, show that equation (2) can be written as Y = a + BD + n, where E () = 0. (b) Let E (Yi|Di) = y+dD. Explain why d may not be equal to 3. (c) Suppose that the course can only be taken by individuals who live in randomly chosen areas within the UK. Suppose that you know post codes of these areas. How would you use data on the post codes of the speed limit violators to consistently estimate 3? Yoi if Di 0 Yli if Di 1 ' = = = 3 Person i, who is caught speeding, can choose to attend a day-long speed awareness course instead of taking three points on his or her license (12 or more penalty points disqualify you from driving). Let Y; = 1 if person i is caught speeding again within the next 3 years, and let Y; = 0 otherwise. Further, let Di 1 if individual i takes the course, and let D = 0 = otherwise. (a) Suppose that Y (2) where Yi (Yoi) denote the potential outcomes if individual i takes (does not take) the course. Assuming that the individual treatment effect of taking the course is constant and equal to 3, show that equation (2) can be written as Y = a + BD + n, where E () = 0. (b) Let E (Yi|Di) = y+dD. Explain why d may not be equal to 3. (c) Suppose that the course can only be taken by individuals who live in randomly chosen areas within the UK. Suppose that you know post codes of these areas. How would you use data on the post codes of the speed limit violators to consistently estimate 3? Yoi if Di 0 Yli if Di 1 ' = = =
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a Assuming that the individual treatment effect of taking the course is constant and equal to 3 we can write the potential outcomes equation as Yi Yoi ... View the full answer
Related Book For
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
Posted Date:
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