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The U.S. federal government enacted the Higher Education Act in 2001, which made people convicted of drug offenses ineligible for federal financial aid. Lovenheim and Owens (2014) study the effect of this policy on college enrollment for those with con- victions relative to those without, using a difference-in-differences (DD) strategy. The following table shows the average college enrollment rates: Pre-Policy Post-Policy No Conviction Conviction 0.623 0.358 0.651 0.269 (a) Using the information above, calculate the DD estimate. (4 points) (b) Write down a regression equation that will allow you to estimate the DD effect of the policy. (4 points) (c) What is the key identifying assumption of the strategy? (5 points) (d) Can you suggest a way to test for the assumption? (6 points) (Hint: Suppose you can have access to some confidential data that provide infor- mation on college enrollment and criminal records over years.) The U.S. federal government enacted the Higher Education Act in 2001, which made people convicted of drug offenses ineligible for federal financial aid. Lovenheim and Owens (2014) study the effect of this policy on college enrollment for those with con- victions relative to those without, using a difference-in-differences (DD) strategy. The following table shows the average college enrollment rates: Pre-Policy Post-Policy No Conviction Conviction 0.623 0.358 0.651 0.269 (a) Using the information above, calculate the DD estimate. (4 points) (b) Write down a regression equation that will allow you to estimate the DD effect of the policy. (4 points) (c) What is the key identifying assumption of the strategy? (5 points) (d) Can you suggest a way to test for the assumption? (6 points) (Hint: Suppose you can have access to some confidential data that provide infor- mation on college enrollment and criminal records over years.)