Question: Provide step-by-step solution 2. Consider two periods and a treatment intervention (for some subpopulation) between the two periods. Y is the (continuous) outcome variable 1

Provide step-by-step solution

2. Consider two periods and a treatment intervention (for some subpopulation) between the two periods. Y is the (continuous) outcome variable 1 if the observation is after the treatment A is a period indicator: A = 0 if the observation is before the treatment D is a treated group indicator: D = 1 if the observation is from the group of treated individuals 0 if the observation is from the group of untreated individuals Consider the following model: Y = at B . A+ y . D +8 . A . D + E where a, B, 7, 6 are parameters and & is the error term. Suppose that the mean of & conditional on A and D is zero: E [EA, D] = 0 What is the d parameter equal to under the above assumption? (Hint: we are looking for an expression with conditional moments.)

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