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Quiz 2 is worth 20% of your final mark. There are three questions and you have to
answer all three of them. You can work on these questions in your own time and you
need to submit your answers through the Turnitin link on Wattle any time before the
due date.
Question 1 - Approximately 600 words [7 marks]
This question does not require you to undertake any analysis yourself. Rather, you are
being asked to critique an existing paper on “The impact of COVID-19 on racial inequality in
business earnings” by Fairlie
Answer the following questions in your own words.
1a) What are the research questions and what data is used to test those questions? Include a
discussion of the strengths and weaknesses of the data used in this paper. [2 marks]
1b) What are the main data analysis techniques used to test those research questions (from
part a)? Describe at least one of those techniques in detail. [3 marks]
1c) How could the analysis be extended using a different model or technique? [2 marks]
Question 2 [6 marks]
These questions are based on the content from our guest lectures in Weeks 9 and 11.
Choose one best answer for each question.
2.1 The bias-variance trade off does not apply in machine learning problems when –
a- The machine learning models used are complex
b- Data has missing values
c- Linear regressions are used
d- None of the above
2
2.2 Cross-validation can be used to compare different machine learning models.
a- True
b- False
2.3 One advantage of using a decision tree over linear regression model is that a decision tree
model will always produce more accurate predictions than a linear regression model.
a- True
b- False
2.4 Why was the expansion of the Medicaid program in Oregon so exciting to economists?
a- It provided affordable health care to all vulnerable individuals in Oregon.
b- It provided a large sample size so that economists could use quantile regressions to
address endogeneity.
c- It enabled causal inference because it was a natural experiment based on lottery
drawings.
d- It was a large-scale program that successfully reduced emergency department visits in
Oregon.
2.5 Difference-in-difference methods are a special case of random-effect models.
a- True
b- False
2.6 RCTs cannot be used to establish causal inference.
a- True
b- False
Question 3 – Approximately 600 words [7 marks]
This question requires you to undertake your own analysis. For one of the datasets used
in the computer labs this year:
3a) Identify a dependent variable that could be estimated by a binary, ordered or multinomial
logit model. Which of these models would you recommend for estimating this variable?
Justify why you would choose this model over the other. [2 marks]
3
3b) Describe an economic research question that can be analysed with the model and the
dependent variable that you chose in part (a). State your null and alternative hypotheses.
Remember to back up your research question with existing literature and/or theory (2-3
references). [2 marks]
3c) Estimate a model with no more than five independent variables to test your research
question from part (b). Present your findings in a Table and interpret the sign and the
statistical significance of the coefficients. Do you find evidence to support your research
hypothesis? Explain. [3 marks]
Include your Stata code (log file) in your assignment submission.