8. Using regression adjustments to estimate the effects of policy intervention Suppose you want to examine the effects of a job training program, and estimate the following regression model to do so: earn 98 = 4.8+ 2.3train +0.32earn 96 + 0.36educ - 0.1age + 2.1 married where earn 98 = labor market earnings in 1998, in thousands of dollars train =1 if the employee participated in the training program, and =0 otherwise earn 96 = labor market earnings in 1996 (the year before the training program), in thousands of dollars educ = years of schooling age = age, in years married =1 if the employee is married, and =0 otherwise n = 1,040 R2 = 0.43 Using unrestricted regression adjustment, which of the following best represents the estimated equation with full interactions? O earn98 = 5.3 + 3.Itrain + 0.35earn 96 + 0.32educ – 0.2age + 2.8married + 0.15 train (married – married) +0.04 train (married – married) +0.057 train (married – married) +1.33 train (married O earn 98 = 5.3+3.1train + 0.35earn 96 + 0.32educ – 0.2age + 2.8married + 0.15 train. (earn 96 -earn96) + 0.04 train. (earn 96 – earn96) +0.057 train(earn96 – earn96) + 1.33 train(earn 96 – earn96)
Using unrestricted regression adjustment, which of the following best represents the estimated equation with full interactions? earn 98 = 5.3 +3.1train +0.35earn 96+ 0.32educ – 0.2age + 2.8married +0.15 train. (married – married) +0.04 train (married – married) +0.057 train (married – married) + 1.33 train (married – married) O earn 98= 5.3 + 3.1train +0.35earn 96 + 0.32educ -0.2age + 2.8married +0.15 train. (earn 96 - earn 96 · (earn 96 – earn96) + 0.04 train (earn 96 – earn96) + 0.057 train (earn96 – earn 96 + 1.33 train earn 96 - earn 96 • ( O earn 98 = 5.3 +3.1train +0.35earn 96 +0.32educ - 0.2age + 2.8married +0.15 train. (age - age) +0.04 train. (age - age) +0.057 train. (age - age) + 1.33 train. (age - age) O earn 98 = 5.3 +3.1train +0.35earn 96 +0.32educ - 0.2age +2.8married +0.15 train earn 96 - earn 96 +0.04 train- ( educ – educ) +0.057 train (age – age) + 1.33 train. (married – married) Using your answer from the preceding question, the estimated average treatment effect of the training program is Tura = Which of the following best represents the meaning of the estimated average effect of the training program? The training program led to an increase in 1998 earnings of $3,100. The training program led to an increase in 1998 earnings of $1,330. The training program led to an increase in 1998 earnings of $2,800. The training program led to a decrease in 1998 earnings of $40.