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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]