Many school districts pay for new school buildings with bond issues that must be approved by majority vote in an election. Supporters of these bond issues typically argue that new buildings improve schools and thereby boost housing values. A recent economics paper used RD to test whether passage of school bonds caused housing values to rise.
- (a) Â (5 pts) What is the assignment variable (a.k.a. the running variable)? Hint: time is not the assignment variable.Â
- (b) Â (10 pts) Explain how to use a basic sharp RD approach to estimate the e?ect of school bond passage on housing values.Â
- (c) Â (5 pts) Provide an equation that implements the approach you described in (b). Assume you observe sale prices of individual homes. Be sure you properly subscript your variables.Â
. For each of the following examples, explain: i) a simple di?erence-in-di?erences strategy; and ii) a generalized DD strategy with controls for time-invariant (cross-sectional) di?erences and time-varying forces that a?ect both treated and control units. In order to design strategy ii), it may be helpful to look at the Angrist & Pischke analysis of the minimum legal drinking age in the DD chapter. For both i) and ii), write out the estimating equation that corresponds to your strategy.
(a) Â (10 pts) California implemented a ?rst-in-the-nation program of paid family leave in 2004. Did this policy increase use of maternity leave? (Unpaid leave was available before the policy change.)
(b) Â (10 pts) Fourteen countries engaged in ?expansionary austerity? policies in response to the 2008 ?nancial crisis. Did these austerity policies work? For simplicity, treat austerity as a dummy variable equal to 1 for countries that engaged in it, 0 otherwise.
(c) Â (10 pts) Some neighborhoods in Los Angeles changed zoning laws to make it easier to mix com- mercial and residential buildings. Did these changes reduce crime? 8. (10 pts)