ECON 6280 Study Guide - Final Guide: Equation, Random Assignment, Dependent And Independent Variables
Document Summary
Empirical methods randomized experiments to answer, how can we best allocate the limited budget through policies to maximize the outcome? : e. g. 1) controlling for as many characteristics as possible: e. g. 2) natural experiments compare a group that faced a natural variation (e. g. price shock/rainfall shock) and an unaffected group before and after the natural variation: e. g. 3) randomized experiments same as natural experiments, but the variation is. Randomized (i. e. chosen by the researcher) through random assignment. Peer effects students benefit from having higher-achieving schoolmates (negative) increase in supply of education, drop in wages for skilled workers. The expected returns to education is not accurate: nguyen"s survey showed that parents believe that returns to primary education are low and returns to higher education are high: policy: require primary education and give parents statistical info. Income constraint the poor are too poor to invest in education: problem: imperfect credit markets no one will lend the poor in developing countries money.
