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Financial literacy instruction was provided for 8 weeks to students enrolled in a 16 week high-school economics class. The students were given a pretest (before

Financial literacy instruction was provided for 8 weeks to students enrolled in a 16 week high-school economics class. The students were given a pretest (before treatment) on financial literacy knowledge in Week 1 and posttest (after treatment) on financial knowledge instruction in Week 16. The average score on the pretest was 40% and the average score on the posttest was 65%. The same tests were administered at the same time to a group of students who did not receive financial literacy instruction. The scores for this group were 39% on the pretest and 49% on the posttest. a. Briefly explain why a comparison of pretest and posttest scores for those students who received financial literacy instruction may fail to give you an accurate estimate of the effectiveness of the financial literacy instruction. b. Make a table to summarize the information given. The first column of the table should be Before Treatment and the second column should be After Treatment. The first row of the table should be Treatment and the second row should be Control. c. Use the information given in your table to provide the difference-indifferences estimate of the effect of financial literacy instruction on financial knowledge. d. Using the before-after and treatment-control notation we developed in class write down the regression model of this problem and identify the coefficient that gives you the difference-in-differences estimator.

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