1. Teddy wants to evaluate the impact of a skills training intervention on participants. He collects baseline data of both treated and control group and recorded outcomes of 150 and 100 for the treated and control respectively. After the intervention, the endline data revealed an outcome of 170 for control group and 300 for the treated group. Using the difference-in-difference, i) calculate the impact of the intervention ii) what would be the expected outcome for the treatment group at endline in absence of treatment? 2. What problems of OLS regression can the Instrumental Variable Regression be used to address? 3. Josephine is interested in the effect of education (T) on earnings (Y), where T = 1 if one attended university, and T = 0 if one did not attend university. He has used Instrumental Variables (IV) estimation, in which he uses father's education (Z) as an instrument for education (T). a. Write down the first-stage regression equation for the IV regression. b. Write down the second-stage regression equation for the IV regression. c. Explain under what conditions father's education will be a valid instrument 4. Daniel is interested in the impact of free skills training on the likelihood of starting own businesses in the Tolon district. If radio adverts and fliers were used to encourage skills training attendance, a. Write down the regression model(s) for this impact evaluation. (3 MARKS) b. Explain the important conditions under which radio adverts and fliers can be considered valid for identifying causal impact. (3 MARKS) c. What coefficient represents the impact estimate? (2 MARKS) d. Under what condition would you have used a regression discontinuity design (RDD) to evaluate this skills training intervention. (2 MARKS) 5. Salia has been offered a job as a project manager and impact evaluation lead for an international non- governmental organization (NGO). The organization is interested in reducing the impact of malaria on household income in poor communities, by providing households with bed nets. For fairness in the assignment of the bed nets, instead of randomizing the intervention at the community-level, an announcement by a 'Gong Gong beater' is used. The 'Gong Gong beater' informs the community to pick up their bed net from the district assembly office. Salia is expected to use an instrumental variable estimation approach to examine the impact of the bed nets (T) on household income (Y), where T = 1 if the household received a bed net, and T = 0 if the household did not have a bed net. a. Write down the first-stage regression equation for the IV regression. (4 marks) b. Write down the second-stage regression equation for the IV regression. (4 marks) c. Explain under what conditions the announcement by the 'Gong Gong beater' will be a valid instrument. (4 marks)