Question
8. Use the motivation in Chapter 17 to assess an experimental set up for a firm manager, meant to estimate the uncertainty regarding a skills
8. Use the motivation in Chapter 17 to assess an experimental set up for a firm manager, meant to estimate the uncertainty regarding a skills training program. A manager wants to know the effects on worker productivity of an online skills training, but knows the training is costly and takes time -- thus could be a failure if implemented. It assigns one of its plants to be a control group (and not receive the training) and one to be a treatment group (and receive the training). The pre-training and post-training productivity levies are given in the table below.
Group (plant) | pre-training (bold is observed) | post-training (bold is observed) |
Control (plant 1) | 30 | 70 |
Treatment (plant 2) | 20 | 90 |
What assumption(s) do we have to make to make the experiment yield actionable results?
Draw a simple figure showing the potential trends in the 2 groups before and after the training.
What is the difference in difference estimate (DiD), in terms of productivity score? Show the calculation.
Does the training program seem like a good investment?
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