This EC2509 problem set must be handed in via Turnitin by Wednesday 23th February 2022, 23.59

Please submit your answer as a single PDF document. The document should contain the results as well as your written answer to the questions, and an appendix with your full R.codes, which could be used to reproduce your results.Marketing Research and Data Analysis

The submitted document should clearly state which question you are attempting. For each question you should include any R output that is required – ideally this should come in form of tables or graphs – , as well as written interpretation of your results – Econometrics is not about being able to produce some R-codes, this is a necessary but not sufficient condition, you also need to be able to explain, in English what you have done, why you have done it, and what we learn from it.

In this problem set you start doing your own piece of analysis in education economics. The research question is: Does attending summer camp improve academic performance?

There is already evidence from Matsudaira (2008) that suggest that attending summer camp improves school performance in maths and reading. You can find it on Moodle.

Question 1 – Planning the project (50 marks)

Before you even open R:

Make a research plan.

1. In an optimal setting without constraints how could you evaluate the causal impact of the summercamp on academic performance?
2. What would be your hypothesis?
3. Spell out the econometric method
4. Write out the empirical specification and the key parameter of interest
5. Which covariates? (check what is in the data and be specific about what you are going to use and why)

• Which covariates might you have wanted in addition to the ones in your dataset if you had collected the data yourself?
• The impact of summercamp may not be the same for all kids. Think of two characteristics along which its estimated impact may differ, and explain your hypothesis.
• What may be the threats to internal validity in this economic problem? How can you find out whether it applies here?

Question 2 – Look at the data and merge (5 marks)

You come across an RCT in which an optional, free summer camp is offered to kids around age 10 via a randomised letter to the parents. The camp includes games to improve math and reading and aims at teaching kids to be persistent to achieve their aims in spite of potential setbacks or obstacles. Signup for the summer camp has to be done by the parents on behalf of their children.

The researchers have abandoned the project and you are not sure how good a job they did.

You get hold of data that has one observation per kid and contains:

• an id for each person,
• their school’s id,
• a dummy variable indicating whether they went to summer camp,
• gender
• parental income
• parental education
• test scores in grade 5, i.e. before the treatment, and below (grades 2-4)
• test scores in grade 6, i.e after the treatment and in consecutive years (grades 7-10)
• a dummy variable whether the individual received a letter inviting them to the summercamp