Problem 1 Regression Discontinuity In the beginning of covid, the US government distributed covid stimulus payments. Sup

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Problem 1 Regression Discontinuity In The Beginning Of Covid The Us Government Distributed Covid Stimulus Payments Sup 1 (136.24 KiB) Viewed 23 times

Problem 1 Regression Discontinuity In the beginning of covid, the US government distributed covid stimulus payments. Suppose you are interested in the effect of receiving the full amount of the first stimulus payment on the total spending in dollars by single individuals in the month after receiving the payment. Single individuals with annual income below $75,00 received the full amount of the stimulus payment You decide to use Regression Discontinuity to answer this question. The graph below shows the RD model. 3150 3100 3050 Total Spending in the month after receivng the stimulus payment 3000 2950 ܬܲܪܪܬܗ 74000 74500 75500 75000 Annual income 76000 a. What is the outcome? (5 points) b. What is the treatment? (5 points) c. What is the running variable? (5 points) d. What is the cutoff? (5 points) e. Who is in the treatment group and who is in the control group? (10 points) What is the discontinuity in the graph and how do you interpret it? (10 points) g. Explain a scenario which can cause manipulation of the running variable around the cutoff. (5 points) h. You are worried about perfect manipulation of the running variable and decide to test for manipulation. Based on the histogram on the next page do you think that there is manipulation of the running variable around the cutoff? Explain. (10 points)
1.5e-04 1.00-04 Density 5.08-05 70000 72500 75000 Annual income 77500 80000