question 1 ]

Your objective is to estimate the effect of electronic voting, D in the 1998 elections defined as a binary indicator variable, on the public expenditure allocated to health care as a percentage of GDP, E, in 1999. Electronic voting is adopted in those municipalities with at least 40,500 registered voters, i.e., All other municipalities use paper ballots. For this question, use the following sample:

i	1	2	3	4	5
P	40,504	40,497	40,482	40,509	40,494
D	1	0	0	1	0
V	32,000	25,000	17,000	28,000	18,000
E	5	3	2	7	1

a.Briefly explain whether D is a valid indicator variable for electronic voting that is suitable for implementing a sharp regression discontinuity design.

b. Briefly explain whether P is a valid treatment assignment variable (or forcing variable).