Assignment #10

Political Science 328

 

This assignment will be due in hard copy form in the department dropbox (outside 745 SWKT) AND uploaded on Learning Suite before 1:30 pm, Thursday, March 28. Turn in the assignment electronically on Learning Suite (separately for each part of the assignment), and on paper (in four separate documents) in the Political Science dropbox. Remember that no late assignments will be accepted.

Type your answers in a regular font (e.g. Times Roman 12). (As noted later, Stata .do files and .log files are displayed in Courier 8.)

This assignment is divided into four parts. You must submit your answers to each part separately, as we will have a different TA grade each part. Make sure that your name, section number as well as the problem set and part number (e.g. Assignment 10, Part 1) are clearly listed on each part. Students who fail to do so may be penalized on the assignment.

If necessary, re-read the section in the syllabus on group work in Academic Honesty and Plagiarism (here) to make sure you are giving proper credit to those you work with and/or the text(s) you use for each problem. As a reminder, you are in violation of this course's policies as well as the Honor Code if you are sharing electronic portions of your assignment with other people. That includes emailing other people code (even snippets of code), .do files, Word files, or anything else related to a problem set. Your assignment must represent your own work. Please work together: We encourage you to do so! But remember that when working together you should product your own independent work product.

Solve the following problems. Show all of your work, but keep your answers concise. Include a copy of your input and output: your .do file and your .log file for Stata. However, do not include unnecessary output (i.e. no data dumps), and format any output so that it is easily readable. Convert Stata input and output (.do files and .log files, respectively) to Courier 8 with single-spacing. Explanation includes statistical and substantive explanation (explain so that a statistical layperson can understand it, and so that a statistical analyst will see your erudition). Highlight your answer.

Note for this assignment: When printing out log files, you do not need to include all of the output for all states or all years (both on regressions and joint significance tests). Include the first one or two states/years and last one or two states/years with an ellipsis in between (as shown on the slides).

  1. {15 points} Think of these as Testing Center problems.

  2. {30} With the recent incidents of gun violence in the U.S., there has been more discussion of different laws regulating guns. Do concealed weapons laws decrease crime (deterrence) or increase crime (more spontaneous use)? A data file (conceal.dta) is found on this part of the assignment on Learning Suite. It consists of data from the U.S. states and DC from 1980-1999. The variables are described within the data set.

    Use the table included on this part of the assignment on Learning Suite to report your results. Note that it does not require you to report all of the coefficients (but it usually requires that you include them in the regressions). Use all of the observations (i.e. all years). Remember to take the natural logarithm of the dependent variable and use clustered (heteroskedasticity- and autocorrelation-robust) standard errors.

    1. Estimate a regression of log(violent crime rate) against conceal and put the results in column (1) of the Table. Remember to calculate the adjusted R2.

    2. Interpret (statistically and substantively) the coefficient of conceal in (1)

    3. Estimate a regression of log(violent crime rate) against conceal and the control variables: prison, density, avginc, pop, pctblack, pctwhite, pctmale. Put the results in column (2) of the Table. Remember to calculate the adjusted R2.

    4. How does adding the control variables affect the estimated effect of concealed weapons laws? Include coefficient size, substantive effect, and statistical significance.

    5. Suggest a variable that varies across states but does not vary over time that could cause omitted variable bias in (2).

    6. Add state fixed effects to model (2) and put the results in column (3). Remember to calculate the joint significance test (F-test). Remember to calculate the adjusted R2 with and without (including and excluding) fixed effects.

    7. Interpret (statistically and substantively) the coefficient of conceal in (3). How does adding the state fixed effects change the estimated effect of concealed weapons laws? Include coefficient size, substantive effect, and statistical significance. Which model is best: (1), (2), or (3)? Why?

    8. In model (3), what is the interpretation of rho?

    9. In model (3), what is the interpretation of corr(u_i, Xb)?

    10. Suggest a variable that varies over time but does not vary across states that could cause omitted variable bias in (3).

    11. Add time fixed effects to model (3) and put the results in column (4). Remember to keep the fixed state effects. Remember to calculate two joint significance tests (F-tests). Remember to calculate the adjusted R2 with and without (including and excluding) fixed effects.

    12. How does adding the time fixed effects change the estimated effect of concealed weapons laws? Include coefficient size, substantive effect, and statistical significance. Which model is best: (1), (2), (3), or (4)? Why?

  3. {25} Case study: Do concealed weapons laws reduce crime?
    Your boss, the Governor, is considering proposing a concealed weapons law to the legislature. There is a normative (constitutional) debate on such laws. However, as a policy analyst, you have been asked to set aside that debate to consider the empirical question: Do concealed weapons laws reduce crime?

    Write a professional memo. You may use any part of the analysis you wish from the previous problem. In addition to the usual concerns addressed in a professional memo, answer the following questions for the governor:
    Remember to include a professional statistical appendix (and a grader's appendix which includes your .do and .log files). Include only relevant data/supporting documentation in your appendices. (That is, do not include anything in your appendix that is not mentioned in your memo or professional statistical appendix, and make sure you include anything that is mentioned in your memo or professional appendix.)

  4. {30} [from Meyer, Viscusi, and Durbin (1995) via Wooldridge (2013)] Practice Final Exam Problem: Effect of Worker Compensation Laws on Time Out of Work
    On July 15, 1980, Kentucky raised the cap on weekly earnings that were covered by workers' compensation. An increase in the cap has no effect on the benefit for low-income workers, but it makes it less costly for a high-income worker (highearn = 1) to stay on workers' compensation. Using a random sample of Kentucky workers before the change, and a separate random sample of Kentucky workers after (afchnge = 1) the change, investigate whether more generous workers' compensation causes people to stay out of work longer. Notice that we have two groups: we expect one group not to change, while we investigate whether the other group changes.

    The data and a description file is found on this part of the assignment on Learning Suite. [Note: Make sure you can import the data by yourself for this problem, or you will have difficulties on the exam.] durat the duration out of work, in weeks. indust is the type of industry, also indicated by separate dummy variables in the data set. injtype is the type of injury, also indicated by separate dummy variables in the data set.

    Explain your choice of model, variables, and the results you obtain. If you could be given more time and money, what other variables would you include in your analysis? What are the limitations and weaknesses of your analysis?

    You do not need a professional report, but you should still interpret and present your results well (e.g. in a table), and explain what you did and why. You should still write up the results in a page or less, not including tables and graphs. Remember to include an appendix showing your work. (In other words, treat this like a problem on the final exam that does not require a professional memo. This means that you can use statistical jargon in your main answer. But you must also explain your results so that they can be understood by the layperson.)