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We consider a randomized experiment, the Tennessee STAR experiment, where students and teachers are randomly assigned to either a small class (15 students) and a

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We consider a randomized experiment, the Tennessee STAR experiment, where students and teachers are randomly assigned to either a small class (15 students) and a regular class (24 students). We want to estimate the effect of smaller class in primary school and use the following linear model: Score = 50 + lClassSize + Controls + u where Score is student's academic score, ClassSz'ze is dummy for small class, and controls includes free lunch status, race, gender, teacher characteristics and so on. However, you estimate the following model instead: Score = a0 + alC'lassSize + v A. Provide conditions for the OLS estimator for an to be unbiased. B. Provide GaussMarkov assumptions for the OLS estimator for Q1. C. Evaluate the sign and the magnitude of bias a1 if teacher's experience has positive effect on score and more experienced teachers are more likely to be assigned to regular class. D. Suppose that teachers and students are randomly assigned to either a small class (15 students) or a regular class. Compare cal to Bl. E. How does the OLS estimator for 1 change as we additionally include parental charac teristics as Controls? V

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