Question

True or False:

1) ____ The key identifying assumption in a typical difference-in-differences (DD) analysis is that the "trends" in the outcome variable differ between the "control group" and the "treatment group" because of both the treatment and a vector of unobserved factors.

2) ____ Heteroskedasticity may not be the most important difficulty for computing correct standard errors.

3) ____ Sharp Regression Discontinuity Designs (RDD) treatment status is a deterministic and discontinuous function of a covariate.

4) ____ Instrumental variables (IV) methods may be unbiased but are never consistent when there are endogenous explanatory variables.

Answer 1

1) ____ The key identifying assumption in a typical difference-in-differences (DD) analysis is that the "trends" in the outcome variable differ between the "control group" and the "treatment group" because of both the treatment and a vector of unobserved factors. True

2) ____ Heteroskedasticity may not be the most important difficulty for computing correct standard errors. False

3) ____ Sharp Regression Discontinuity Designs (RDD) treatment status is a deterministic and discontinuous function of a covariate. False

4) ____ Instrumental variables (IV) methods may be unbiased but are never consistent when there are endogenous explanatory variables. True