Q and A for the topic: General

AUTHOR Marco Steenbergen PUBLISHED May 5, 2024 Table of contents Instructions Problems Set 1 Set 2 References Instructions This homework covers IVs and RDDs. It is due on May 20 at 23.59 hours. The homework is to be completed in groups of 3 students. You should submit: The answers in the quiz tool on OLAT. This will provide instant feedback on your performance. An R syntax file via email to [email protected]. Without this file, you will not receive any points for the homework. Good luck! Problems Set 1 A university discovers that many students have to work while studying. It fears that the combination of work and study negatively affects scholastic performance. For this reason, the university administration decides to make available stipends to students. The policy is limited to students with parental incomes at 30 percent of the median or less. Since this still leaves too many students for the available budget, the administration also makes eligibility contingent on a standardized test and sets a minimum score of 80 out of 100 points. Those indigent students who score at least 80 receive a stipend, whereas others do not.1 The minimum test score is advertised ahead of the start of the stipend program. The university administration has asked you to evaluate the effect of stipends on performance, as measured by student’s GPA at the end of the year.2 It has collected the following data, which can be found in stipend.Rda: test is the standardized test score that was used to determine who is eligible to receive a stipend. motivation is a survey measure of student’s motivation that was taken in the summer before the academic year started and before the standardized test was taken. Higher scores mean that students are more motivated to succeed in their studies. gpa is the grade point average at the end of the academic year and serves as the outcome measure. Now answer the following questions. Using the approach of Imbens and Kalyanaraman (2012), what is the bandwidth you should use? Using a polynomial regression of order 3 and controlling for motivation, what is the estimate of the treatment effect? Based on appropriate tests, which of the following conclusions can you draw? Which of the following statements best describes when we perform a placebo test on the location of the minimum test score? The students at this university are an altruistic lot. Someone discovers that a subset of students share their stipends with peers who did not meet the test score but still need the money. What assumption would this violate? Set 2 A team of scholars performs the following experiment on the effects of voting advice applications (VAAs) on voting behavior, specifically voting correctly (Lau and Redlawsk 1997). A random sample of 1000 respondents is drawn. Half of the sample is randomly assigned to the treatment, which means they receive a letter encouraging them to use a VAA. The other half do not receive such encouragement. Voting correctly is coded 1 if someone’s vote corresponds to what it would have been under full information. Among those who were encouraged to use a VAA, the proportion of people who voted correctly was 0.35. Among those who were not, that proportion was 0.30. Since encouragement does not equate actual treatment intake, the team of scholars also recorded whether someone had actually used a VAA. The team obtains the following information: Of those encouraged to take the treatment, 250 did use a VAA. Of those assigned to the control group, 300 individuals did not use a VAA. Based on the information and what you know from the lecture, please answer the following questions. What is the intention-to-treat effect? How many always-takers are “hiding” among those who used a VAA and were encouraged to do so? What is the compliance rate? What is the LATE? The authors find that those encouraged to use a VAA also tended to watch more news about the election. What, if any, assumption is being violated here? References Imbens, Guido, and Karthik Kalyanaraman. 2012. “Optimal Bandwidth Choice for the Regression Discontinuity Estimator.” The Review of Economic Studies 79 (3): 933–59. https://doi.org/10.1093/restud/rdr043. Lau, Richard R., and David P. Redlawsk. 1997. “Voting Correctly.” American Political Science Review 91 (3): 585–98. https://doi.org/10.2307/2952076. Footnotes You may assume that everyone who is eligible to take the stipend also does and that no one who is not eligible can receive the money.↩︎ GPA = grade point average. For this exercise, we assume the university is located in the United States and uses a grading scale from 0 to 4. On this scale, 0 means F (fail), 1 corresponds to a grade of D, 2 to a grade C, 3 to a grade of B, and 4 to a grade of A.↩︎

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DATE TRANSACTIONS January 2 Purchased supplies for $14,000; issued Check 1015. January 2 Purchased a one-year insurance policy for $16,800. January 7 Sold services for $30,000 in cash and $20,000 on credit during the first week of January. January 12 Collected a total of $8,000 on account from credit customers during the first week of January. January 12 Issued Check 1017 for $7,200 to pay for special promotional advertising to new businesses on the local radio station during the month. January 13 Collected a total of $9,000 on account from credit customers during the second week of January. January 14 Returned supplies that were damaged for a cash refund of $1,500. January 15 Sold services for $41,400 in cash and $4,600 on credit during the second week of January. January 20 Purchased supplies for $10,000 from White’s, Incorporated; received Invoice 2384 payable in 30 days. January 20 Sold services for $25,000 in cash and $7,000 on credit during the third week of January. January 20 Collected a total of $11,200 on account from credit customers during the third week of January. January 21 Issued Check 1018 for $14,130 to pay for maintenance work on the office equipment. January 22 Issued Check 1019 for $7,200 to pay for special promotional advertising to new businesses in the local newspaper. January 23 Received the monthly telephone bill for $2,050 and paid it with Check 1020. January 26 Collected a total of $3,200 on account from credit customers during the fourth week of January. January 27 Issued Check 1021 for $6,000 to Office Plus as payment on account for Invoice 2223. January 28 Sent Check 1022 for $5,350 in payment of the monthly bill for utilities. January 29 Sold services for $38,000 in cash and $5,500 on credit during the fourth week of January. January 31 Issued Checks 1023–1027 for $65,600 to pay the monthly salaries of the regular employees and three part-time workers. January 31 Issued Check 1028 for $24,000 for personal use. January 31 Issued Check 1029 for $8,300 to pay for maintenance services for the month. January 31 Purchased additional equipment for $30,000 from Contemporary Equipment Company; issued Check 1030 for $20,000 and bought the rest on credit. The equipment has a five-year life and no salvage value. January 31 Sold services for $15,200 in cash and $3,240 on credit on January 31. ADJUSTMENTS January 31 Compute and record the adjustment for supplies used during the month. An inventory taken on January 31 showed supplies of $9,400 on hand. January 31 Compute and record the adjustment for expired insurance for the month. January 31 Record the adjustment for one month of expired rent of $4,000. January 31 Record the adjustment for depreciation of $183 on the old equipment for the month. The first adjustment for depreciation for the new equipment will be recorded in February General Ledger tab: Enter the account balances for January 1, 20X2 from the postclosing trial balance prepared on December 31, 20X1, which appears in Figure 6.3. General Journal tab: Analyze each of the transactions listed for January and record it in the general journal. General Ledger tab: Post the transactions to the general ledger accounts. Worksheet tab: Prepare the Trial Balance section of the worksheet. Worksheet tab: Prepare the Adjustments section of the worksheet using the adjusting transactions. Worksheet tab: Complete the worksheet. Income Statement tab: Prepare an income statement for the month. Statement of Owner's Equity tab: Prepare a statement of owner’s equity. Balance Sheet tab: Prepare a balance sheet. Adjusting and Closing tab: Record the adjusting entries and the closing entries in the general journal. General Ledger tab: Post the adjusting entries and the closing entries to the general ledger accounts. Post Closing tab: Prepare a postclosing trial balance.

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