Question: Answer the following question. Question 1: Prove that the coefficient 1 will estimate the discrete change at the threshold. Drinki =Bo + BIZi + B2Agei

Answer the following question.

Question 1: Prove that the coefficient 1 will estimate the discrete change at the threshold. Drinki =Bo + BIZi + B2Agei + B3Agei * Zi + B4Age, + 35Age, * Zi + B6Age; + ByAge, * Zi + Wi . Remember Zi = 1 if above threshold 0 if below . Hint: Age is centered at the threshold . Hint: Compare the fitted value of the regression right above and right below the threshold Question 2: If you do not recenter age at 21 what combination of parameters get you the estimate of the change at 21

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