Spring 2009 Paul S!rimp" (paul_s@mit.edu) #u$iao %uang (yhuang7@mit.edu) &ue' T!( )eb 19 A. From Wooldridge: C.2, C.3, C., C.!, C.7, C." #. Additional pro$lems 1. %his pro$lem as&s you to use 'tata or 'A' to (ondu(t a series o) sampling e*periments. a. +ra, !-- random samples o) si.e / )rom a random num$er generator )or a standard normal distri$ution. %hen in(rease the sample si.e to 32. Finally, in(rease the sample si.e to 12/. 0lot histograms o) the sampling distri$utions o) 1i) the sample mean and 1ii) the sample 2arian(e, )or ea(h these three sample si.es. 3o, repeat your e*periments )or three samples dra,n )rom another parametri( distri$ution o) your (hoi(e 1e.g., a uni)orm distri$ution). +is(uss the results o) your e*periments in light o) the (entral limit theorem. $. 4our e*periments produ(e 5samples o) sample means.6 Compute the mean and 2arian(e o) the sample means generated $y ea(h e*periment and (ompare them to the mean and 2arian(e predi(ted $y statisti(al theory. +oes the 2arian(e o) the sample means 1i.e., the sampling 2arian(e) de(rease ,ith sample si.e at the rate predi(ted $y the theory7 +oes 3ormality matter )or this7 2. 4ou are as&ed to (ondu(t a so(ial e*periment to measure the e))e(ts o) a 8o$ 'ear(h Assistan(e program designed to help unemployed ,or&ers )ind 9o$s. 4ou ,ill do this $y randomly (hoosing n1 e*perimental su$9e(ts and n2 (ontrol su$9e(ts )rom a pool o) n1:n2;n unemployed ,or&ers ,ho ,ere sele(ted at random )rom the population o) ne, <nemployment =nsuran(e (laimants in >assa(hussetts. a. Find the (hoi(e o) proportion treated, p;n1?n, that minimi.es the sampling 2arian(e o) the di))eren(e in employment rates $et,een treatment and (ontrols. 1%reat n as a &no,n (onstant). $. 3o, assume that it (osts A dollars to (olle(t data on anyone in your e*periment and that the 9o$ sear(h assistan(e pro2ided to the e*perimental group (osts @ dollars. 4ou (an (hoose any sample si.e 1n) $ut you must spend no more than A dollars on the e*periment. Again, maintaining the assumption that there is no treatment e))e(t, sol2e )or the 2alue o) p ,hi(h minimi.es the 2arian(e o) the treatment?(ontrol (ontrast gi2en the e*perimenterBs $udget (onstraint. =nterpret your result and (ompare to part 1a). (. Why is it use)ul to do e*er(ises li&e 1a) and 1$) ,hile assuming there is a(tually no treatment e))e(t7 1o2er) 1 3. %a$le 3 in the Wood$ury and A.C. 'piegelman, paper on the reading list reports the results o) t,o so(ial e*periments e*amining the relationship $et,een <nemployment =nsuran(e 1<=) and the length o) time unemployed. =n the Employer Experiment, any <= re(ipient )inding employment )or at least months re(ei2ed a 2ou(her ,orth D!-- to his or her employer. =n the Claimant Experiment, any <= re(ipient )inding employment )or at least months re(ei2ed D!-- dire(tly. a. For ea(h e*periment, test the hypothesis that $onuses de(reased the proportion o) <= (laimants ,ho e*hausted their $ene)its. For the employer e*periment, (ompute the test statisti( under t,o s(enarios: 1i) the e*periment has no e))e(tE 1ii) the e*periment has an e))e(t. $. For ea(h e*periment, pi(& a signi)i(an(e le2el and test the hypothesis that the e*periment redu(ed ,ee&s o) insured unemployment in the )irst spell using a oneFtailed and t,oFtailed test. Whi(h test seems to ma&e more sense in this (ase7 2