Health Economy Assignment | Homework For You

We have Health Economy related assignment, please see attached. Can u prove your detail feedback in form of an essay? Question 1: Suppose there is a strong negative correlation between smoking and wages evident in cross sectional analysis. A researcher notes that a new and highly effective smoking cessation product is being distributed through a single retail chain. She considers using the distance of an individual’s house to one of the retailer’s outlets as an instrument for smoking in order to establish causality. Along with distance and whether a person is using the smoking cessation product or not, she has a random sample of data from 20% of the population which contains self-reported smoking status, age, sex, marital status, number of children and employment status.

A. Assess the validity of the proposed instrument. Describe clearly how the researcher can assess the strength of the instrument.

B. Assuming the instrument were valid, carefully describe the population for which it would estimate the average effect of quitting smoking.

C. Write down the first stage, second stage and reduced form equations, which the researcher may want to estimate, as well as an equation which represents the causal relationship of interest.

D. State clearly whether you think that two stage least squares can recover the causal effect of the smoking cessation product using distance as an instrument. Justify your answer.

Question 2: Answer the questions below. Is the statement true, false, or uncertain? If the statement is true or false, explain why. If the statement is uncertain, give conditions under which it is true and conditions under which it is false. Your answer should be short and to the point.

A. Estimates of returns to schooling on health obtained by using an instrumental variable approach are always smaller than those obtained by a naive OLS regression, because they are dealing with the problem of omitted variable bias.

B. In order to obtain valid estimates from a difference in difference regression it is necessary to assume that the treated and the control group have the same values of the dependent variable in the pretreatment period.

C. When researchers have access to panel data a fixed effects approach is more commonly used than a random effects approach in health economics.

D. A sharp regression discontinuity design requires all of the treated to be compliers, never takers or always takers. Get Economics homework help today