In the country of Utopia there is one selective university (University of Utopia, or UU), and several other non-selective ones. To be admitted to UU, students must score at least 1300 points on the U-SAT (the Utopian SAT). Some students that score above 1300 choose not to attend UU (they choose to study in neighboring Dystopia, or they enroll in a less selective university), while some students who score below 1300 are able to attend UU anyway because of other outstanding admission credentials. Researchers are interested in estimating the causal effect of attending UU on earnings. They collect data on earnings of recent Utopian university graduates, and plan to estimate the following regression: ln = 0 + 1 + a. Researcher A: "To estimate the causal effect of attending UU, we can simply compare the earnings of recent UU graduates to recent graduates of other universities." Do you think Researcher A's strategy recovers the causal effect of attending UU? Explain. Researcher B: "I suggest instead that we use an instrumental variable strategy: create a dummy variable defined as follows: = 1 if scored above 1300 on U-SAT 0 otherwise Then use as an instrument for ." b. What do