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4. This is motivated by the Oregon Health Insurance Experiment (See chapter 1 in the text book). You are more likely to use emergency room

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4. This is motivated by the Oregon Health Insurance Experiment (See chapter 1 in the text book). You are more likely to use emergency room when you do not have a health insurance, because you would put off going to hospital until it becomes very acute. The state of Oregon ran an experiment to see the effect of having health insurance on the frequency (Y) of the emergency room use. They randomly selected people among those without insurance, and provided them with an offer (Z = 1 if he got an offer and 2 = 0 other- wise.) of free insurance, If a person accepts the offer, then he or she would get the free insurance (X = 1 if he has insurance and X = 0 otherwise). Below are the data ER use (Y) Insurance (X) Offer (2) 0 0 1 0 0 0 0 0 0 1 1 0 0 1 0 1 Manually calculate OLS and IV estimates for the slope coefficient of X How do they compare? 4. This is motivated by the Oregon Health Insurance Experiment (See chapter 1 in the text book). You are more likely to use emergency room when you do not have a health insurance, because you would put off going to hospital until it becomes very acute. The state of Oregon ran an experiment to see the effect of having health insurance on the frequency (Y) of the emergency room use. They randomly selected people among those without insurance, and provided them with an offer (Z = 1 if he got an offer and 2 = 0 other- wise.) of free insurance, If a person accepts the offer, then he or she would get the free insurance (X = 1 if he has insurance and X = 0 otherwise). Below are the data ER use (Y) Insurance (X) Offer (2) 0 0 1 0 0 0 0 0 0 1 1 0 0 1 0 1 Manually calculate OLS and IV estimates for the slope coefficient of X How do they compare

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