Assignment # 2
Economics 4F03 Fall 2024
ALL WORK IS TO BE UPLOADED TO THE A2L DROPBOX
Answer each of the following in a few sentences. References are to readings posted on Avenue to Learn (A2L).
1. Why is random assignment of participants to control and treatment groups a fundamental feature of lab, social and field experiments? [5]
2. According to Falk and Fehr (2003), what are three objections to lab experiments? [9]
3. Explain how attrition can cause bias in a social experiment. [5]
4. Explain how substitution can cause bias in a social experiment. [5]
5. Explain why the evaluation of the effect of a training program on earnings using an observational study is likely to suffer from selection bias. [5]
6. Consider a situation where researchers use an unusually large change in a province A’s minimum wage to study how it affects employment. They compare the change in employment in province A to the change in employment in province B where the minimum wage is kept constant. [12]
(a) What kind of ‘experiment’ are they using? [3] (b) What kind of estimator are they using? [3]
(c) Why would we expect this estimator to have less bias than a before and after (pre-post) comparison using only province A? [6]
7. Meyer (1995) lists nine threats to internal validity of natural experiments. Describe three. [9]