User Account

All Pages

What assumptions should a valid iv satisfy in this case

Assignment Help Econometrics
Reference no: EM131132140

You would like to estimate the effect of police size on city-level crime on a cross-section of cities. A regression of crime rate on police
size (per population) gives an estimate of 0. Suppose that people make their city increase police size if crime increases for some other
reason.

(a) Does that lead to a bias the OLS estimates for the causal effect of police size on crime? Explain.

(b) Does the estimated 0 coefficient mean that police size has no effect on crime?

(c) What assumptions should a valid IV satisfy in this case?

(d) Do you think electoral cycles can serve as a valid instrument (assuming incumbent city governments spend more on police in election years, ceteris paribus)? Why or why not?

Reference no: EM131132140

Questions Cloud

The effect of the introduction of atms and credit cards : Re-compute your answer to part (b). Finally, with the advent of credit cards, this person pays for all her purchases using her card. She withdraws no money until the fourth day, when she withdraws the whole amount necessary to pay for her credit c..
What is the demand for central bank money : What is the impact on the interest rate if central bank money is increased to $300 billion?
Compute the economic order quantity : Master Hatter's demand for hats is 4000 per year. The order cost is $25 and the carrying cost is 15% of the price paid to the supplier. The cost paid to supplier is $12 per unit. Compute the Economic Order Quantity. The supplier has indicated that Ma..
What does it mean to prove something in mathematics : What does it mean to prove something in mathematics? How is this different from in real life? Give an example of something you've had to prove in your own life. What evidence did you provide to support your reasoning? What strategies did you use ..
What assumptions should a valid iv satisfy in this case : You would like to estimate the effect of police size on city-level crime on a cross-section of cities. Does the estimated 0 coefficient mean that police size has no effect on crime? What assumptions should a valid IV satisfy in this case
Describe two lessons you would educate senior executives : Would you call the consideration you selected to be more of an ethical consideration or a legal consideration? Do you think the difference is important? Why or why not? Justify your answer by citing at least two article that supports your response..
What is the current stance of monetary policy : What is the current stance of monetary policy? (Note that policy will be described in terms of increasing or decreasing the federal funds rate as opposed to increasing or decreasing the money supply.)
Evaluate the effectiveness of hris packages : Would your consideration change depending on the size of your organization and/or the products that your organization provides? How would you evaluate an HRIS package's effectiveness after implementation?
What is corporation social responsibility : What is a corporation’s social responsibility? Are there corporate labor relations practices that should be unacceptable? If so, how should these standards be enforced?

Reviews

Write a Review

Econometrics Questions & Answers

  Illustrate the consumers budget set

A consumer's budget set for two goods ( X and Y ) is 500 >2X +4Y a.Illustrate the budget set in a diagram.b.Does the budget set change if the prices of both goods double and theconsumer's income also doubles Explain.

  What rate of interest is bank earning from loan transaction

A restaurant borrows $35,000 It will pay back over 5 year period with the following payment terms: 15%, 20%, 25%, 30%, 35% of the initial loan at the end of the first period, and so forth. a) What rate of interest is the bank earning from this loan..

  How much can wilma expect to sell her bond for

Wilma bought a 10-year $1000 bond when the interest rate was 5% per year. So her bond would provide her with $50 at the end of each of ten successive years; and the $1000 is also returned at the end of ten years. She has just collected her seventh..

  Determine the economic service life and corresponding aw

A new gear grinding machine for composite materials has a first cost of P=$100,000 and can be used for a maximum of 3 years. Its salvage value is estimated by the relation S=P(0.85)n, where n is the number of years after purchase. The operating co..

  Calculate dividend yield and total return to the stock

A stock was priced at $150 per share at the end of 2007. The following table shows dividends per share paid during each year and the price of the stock at the end of the year for the following four years: 2008, 2009, 2010, 2011 and the Dividends P..

  Apply the midpoints approach to the elasticity of supply

100 popsicles are sold per day in the perpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increase from $1 to $2 is unit-elastic (Es 51.0). So how many popsicles will be sold each day in the short run if th..

  Calculate the net cash flow for the year 2015

You went on a trip to Tombstone, Arizona and stopped into a gift shop, where you began talking with the owner. You find out that she needs to apply for a small business loan and needs to calculate the net cash flow for the year 2015.

  How many years it will take an investment to triple itself

compare the interest rate earned on $15000 for 25 years at 7% simple interest with the amount of interest earned if interest were compounded annually SIMPLE INTEREST: I=iPN=(0.07)($15,000)(25) I=$26,250 COMPOUND INTEREST I=P[(1+i)^N-1] I=$15,000[(1..

  What does the fact suggest about price elasticity of supply

in the spring 2008, Senators John McCain and Hillary Clinton proposed a temporary elimination of the federal gasoline tax, effective only during summer of 2008, in order to help consumers deal with high gasoline price. what does this fact suggest ..

  Write clearly and concisely about health economics

Explain how selected economic principles apply to the health care market and the provisions of health care services.

  What quantity should the decision makers plan to produce

A firm is planning to manufacture a new product. As the selling price is increased, the quantity that can be sold decreases. Numerically they estimate P = $35.00 - 0.02Q (P = selling price per unit, Q = quantity sold per year)On the other hand, ma..

  What is the output of each firm if they collude to produce

Once again, assume Cournot competition in an industry in which market demand is described by P = 260 - 2Q and in which each firm has a marginal cost of 20. However, instead of two firms, let there now be four. a. What is the one-period Nash equilibri..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd